Transcripts For CNBC Closing Bell 20240712

Contracting by 5 this year and within the s p headlines like those punishing reopening trades, punishing pretty much everything as you can see behind me particularly the likes of norwegian cruises, winn resorts, banks, airlines sliding significantly. Some of those names down as much as 10 sara. Weve got a huge lineup of guests to help make sense of this selloff today for you air yell investments john rogers saw a onceinalifetime buying opportunity. His take and where we stand now. Plus well discuss the new tristate travel order what it means for the entire leisure landscape for ceo of booking holdings, a perfect day to get thoughts on what travel will look like well speak to the ceo of slack about working and new product today. Full Team Coverage of this pullback and final hour of trade. Mike santoli tracking Market Action the most concerning covid outbreaks with the new numbers and Brian Sullivan watching the drop for energy sector, the worst performer. First lets get to josh lipton with breaking news on apple. Josh. Yes sara, this news just coming in from apple that it will temporarily reclose seven stores in houston, texas, due to covid19 spike remember, apple reclosed 11 last week eighteen stores apple has reclosed for this season that means more than 200 of the 271 apple stores are open in the u. S. Of course, remember, when we say open, many of those stores are open for Curbside Pickup apple stressed from the beginning as they began to open up these stores, they would follow the data and take action if necessary they are doing so here apple announcing its going to temporarily reclose seven stores in houston, texas. Guys, back to you. Thanks so much. Actually moving the stock lower than it was, down 1. 8 , apple opened higher today having hit a record high yesterday but selling off now with the rest of the market down 2 lets get to mike for a look at whats happening in the market mike, right across the screens. Apple outperforming by 1 percentage point but this is not a day when big tech in general was able to rescue the tape from pretty thorough flush. Pretty inclusive move to the down yeartodate, s p 500. Best to view this as part of an ongoing shakeout that started two weeks ago. This is june 8th that was pretty much the most overbought moment technically for the market it was the time of maximum optimism about the reopening we did see that big oneday 6 drop a couple of thursdays ago but really going all the way back, i keep pointing out, you go back to march of this year, there was quick fail rally there. Weve just been chopping around in here. Above where we were a week ago monday at the low. Yes, a pretty thorough pullback today but not something thats really change the complex. Weve been reassessing for the open equal weighted s p average stock down 12 in two weeks and two days a lot of that process of correcting for that overbought condition has certainly been under way for a while. Look at this chart of two risk measures out there its Investment Grade bond spreads along with the s p volatility index both of these, when they go up, people more worried about the risk and outlook when they go down, they are relaxes. Back here in february or march, the vix led the way for credit, building up stress levels up into those lows in march as it bled lower, credit remained low and tight, vix. Its been very grudging on the downside theres been a lot more of an expectation among equity, volatility traders, could be more shakiness in the market down the road. Folks would think this would correct to this direction. The vix is too alarmist right now but arguably the credit markets most benefiting from the feds fblgt on buying bonds and also massive, massive inflows into Corporate Bond funds. I do think you have to keep an eye on these things and suggest stocks and bonds havent been completely in sync leading up to today when it comes to risk assessment. Another factor weve been watching the last month or so was the fact that Institutional Investors at least were still relatively cautiously positioned coming into this week did we see that shift a little bit and perhaps as a contrarian indicate explain a little why weve been selling off today. Incrementally becoming less the case that big Institutional Investors have been fighting this move. Now, some surveys out that still say the folks are cautious the Weekly Survey of investors intelligence, advisers, newsletter services, that really showed growing bullishness i think its mixed on the sentiment front. I think its less the case today, at least incrementally that sentiment is a benefit than it was a couple weeks ago. So youre losing a little bit of that tail wind even though it remains the case that people are not overinvested or overoptimistic about the market yet. Talk about the reasons, mike. This was a little deja vu this morning when we started to get numbers out of florida, double digit positivity rates on testing, out of texas, california not just spikes in cases but rises in hospitalizations as well and the number of positives versus the number of tests is it here we go all over again or different this time what do you see in the Market Action that gives you a clue i dont know all over again because we arent going to be taken by surprise as we were a few months ago but the data has made it harder and harder to say, well, consumers arent going to be affected by this no municipalities or states are going to back slide in terms of reopening efforts, all that stuff is a little more in question i think these things reach a certain threshold where they build and build and build and the market can shrug them off. I dont want to extrapolate. Were down 2 , still in this range. I dont think today means all of a sudden were back in this spiral when every day case loads go up and the market reacts to it on a one for one basis. I think you have to be wary of thinking we know where this goes but clearly the markets ability to strictly ignore those numbers is not what it was a couple weeks ago. Absolutely. Gold hitting its highest level since october 2012, really breaking out here. Mike, well see you later. Not helping the mood today this years Economic Growth for the world is going to be uglier than thought that was the message from the imf, International Monetary fund projecting deeper downturn in 2020 and shallower recovery in 2021 their forecast for this year, now negative 4. 9 . Thats almost 2 Percentage Points below where they were looking at the forecast two months ago imf said social distancing measuring will likely replain in place until the end of the year and extended lockdowns denting Economic Activity, productivity and Global Supply chains as for the u. S. In particular, imf sees a drop of 8 of growth in 2020 and rebound of only 4. 5 growth next year thats not even factoring the risk here of a second wave of infection in the fall. Europes outlook is worth in terms of growth this year and china is the only one of the few, one of the only countries set to grow this year but only 1 and thats a sharp drop from where they are grog in the to 7 range. One number ill leave you with 12 trillion thats a Global Growth lost during covid19 over the next two years because of this pandemic and the subsequently economic crisis, wilfred. Sara, its definitely a great wakeup call. Its not totally forwardlooking all the data they have used to get to that point, what weve been seeing coming out of recent weeks but its a fantastic reminder and refresher of just how dire the Economic Outlook remains when weve seen clearly a massive, massive bounce in the stock market. And just how global it is i talked to the chief economist of the imf, wilfred this morning, and we talked about the fact the virus spread to emerging markets and big ones like brazil and india, which got sharper down grades to their forecast this time around than where we were just a few months ago. Add that all together and youve really got a huge hit when it comes to Economic Activity and demand its going to take a long time to climb out of the ole. I will will say imf on the optimistic side because they have to downgrade their forecast every few months. Lets get an update on the virus itself and the thing that caused this microeconomic pain meg tierel has the latest for us. Part of the news today Governor Cuomo and new jersey and connecticut announcing the quarantine two weeks from anybody coming in from certain states with high infection rates. This announced this as a travel virry in nine states that fit that criteria a rate of infection 10 per 1,000 people on sevenday rolling average or 10 of the population testing positive on sevenday rolling average. Youre seeing across the south and west many of these states weve been talking about and, guys, just getting new numbers from several states today and they are hitting new records. Florida announcing more than 5,05, 5,500 new cases and concerning positive rate of 16 up from 11 yesterday. California also just announcing more than 7100 new cases today they say their 14day test positive rates still only 5. 1 but that has started to tick higher and called out concerning increase in hospitalizations even though they said they still do have lots of capacity oklahoma just announcing a Record Number of new cases, a smaller number, but record for them, 482 new cases. Now on the hospitalizations front, several states hitting records yesterday in the number of currently hospitalized patients with covid19 texas of particular concern and houston in particular warning that they may be within two weeks of exceeding their icu capacity houston, of course, being the place josh just told us apple decided to reclose those stores. Guys. Meg terrell energy getting hit particularly hard worst performing sector, crude oil down 6 . Brian sullivan has more on whats behind this move. Sara, given everything you talked about in the future oil and gas biggest decliners, down 5 right now, about 50 worse than the next worst sector obviously this relockdown or slowdown fears, thats whats impacting it as well youve got to watch transit, traffic, and flying levels average down 5 , smaller caps down 8 or 9 thats a chart were talking a lot about houston, not picking on it, but its the fourth biggest city in america, car heavy, oil and gas reliant in many ways. The reddish orange line, thats what to Pay Attention to blue line Traffic Congestion last year. So the red line is traffic now versus last year we know its down from last year but whats concerning, guys, if you look it seems to be on the decline. As we reopen, driving should go up it looks like houston is going in the opposite direction. I could overlay atlanta, it might look pretty much the same way. If there are these reclosings or people are afraid to go out, youre going to see transportation drop, maybe flying numbers, which had been coming up drop again 70 of all oil use is for transportation of some kind. If you want to know where oil is going, watch what everybody is doing in their car, on the plane, assuming they get on that plane. So the question, brian, are we optimistic or pessimistic about the price of oil, if youre saying its a good demand gauge. Its still heading for its best quarter in years, up 80 as we look to wrap up the quarter. I wasnt a good student like you were, d minus high school physicses, i went from c minus and my dad wasnt happy. I went from terrible to not good i think thats what oil and gas has been doing yes, its gone haywire this quarter but it came from zero, less than zero to quote an 80s book in movies youre looking at 80 for the quarter. But at the same time lets be very, very honest with ourselves. 40 oil, 45 oil, that is not enough by any measure, to, quote, save the industry allow these companies, some of them which are very highly leveraged can they maybe kind of roll on as a guest described a Zombie Company just existing to pay town their interest in bond payments and hopefully their salaries by no means is it good for the industry the cheap, lowest cost of production, pioneer, chevron, kpons, they can muddle through this the rest of thelma lot of companies could still be at risk, especially, guys, if prices go lower because we stop driving again. Brian sullivan, thank you very much as always. Weve got 45 minutes left of the session, just off the lows, down 600 on the dow,down down 860 still ahead, you dont want to miss any of the show weve got great market guests, the fallout with the ceo of Bookings Holding and john rogers and Gabriella Santos at jpmorgan youre watching closing bell on cnbc. 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Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Welcome back s p down 2. 3 . New york Governor Cuomo announcing today travelers from u. S. Covid19 hot spots will need for quarantine themselves 14 days to enter new york, new jersey, connecticut. That weighing heavily. U. S. Airlines and Online Travel stocks taking a dive in todays crowd. Booking holdings among some of those names. Its down 4 as we stand that company owns brands such as price line, kayak, open table and key insights into how the American Consumer is holding up. Joining us ceo glen fogel. Thanks for joining us. Thanks for having me. When you see the type of announcement we saw today from Governor Cuomo, does that annoy you or do you support those types of decisions i think we always refer to the government officials who really understand the situation and know what the right thing to do is to maintain safety because we always believe safety first we understand when you see a lot going up in some areas, reimportation where i live in the new york area, whether youre in europe and saying, hey, not sure take in people from u. S. Or youre in hawaii for a long time hasnt let anybody come into hawaii without a 14day in your hotel so we understand it completely. So there are a lot of states on that list, glen how much travel activity is going to be disrupted or halted because of this order today . Its hard to say. Certainly some will be what a lot of people will do is shift where they were going to go if you thought im going to new york now im not going to go, stay in a hotel 14 days, do somewhere else thats what they will do change where they are going to go. Has the u. S. Got much greater ability to pivot in europe where you likely crossing borders more on that potential vacation well, its interesting. Europe right now is in the middle of trying to figure out exactly what they are going to be they have been wanting to open for a long time, complete borderfree travel throughout europe, which is really good for us europe is our strong market. In the u. S. , its rare where states are keeping other people from going to another state. Infe in fact i think i saw doj, hawaii quarantined closely, is this okay or not from our point of view, we want safety we want people to do whats safe if people want to travel to a place thats not safe or in a place not safe, not to come to their hometown, were okay with that we are always willing to do whatever the officials want us to do. Youve got great data, glen, realtime insights from consumers, whether its open table or kayak or price line what are you seeing in the states that are seeing the biggest hot spots right now in terms of people making plans and potentially slowing down those plans. Is there any data you can share with us about the economic hit we can see as a result of this first wave or hot spot, second wave, whatever you want to call it yeah, actually, what i can share is pretty much industry wide you can see very clearly that when places open up, one of the first things people want to do is go book somewhere to go. Thats just pentup desire to get out of where youve been holed up for two months, three months, how long long its been. You want to travel somewhere we see it happened throughout the world, its natural. Whats interesting, once the pentup demand is taken, gotten that out of their system, whats going to happen next i dont think anybody knows. Same thing we dont know whats going to happen with the virus is it going to come back hard . Nobody knows. That said, what about shortterm data. We know open tablesaw a spike. Are we already seeing that pull back significantly in the floridas and arizonas of this world that are seeing more cases again . We put that and everybody following it day by day and how many restaurants arent state by state. Its one of those things, a little bit of a lag. Lets see over a couple of weeks what happens in florida and texas and the other hot spots. What about if eu does ban american visitors to the union, whats that going to do to travel activity and the bookings youve already seen happen to europe i think everybody is quite aware theres been very little travel across the atlantic either way, whether europeans coming to the u. S. Both places have said we dont want people traveling unless its really, really critical. So theres not a big change. People are still scared to be on a plane. They are just concerned they are going to catch the virus on the plane. They dont want to get on that plane. I think until we get a vaccine, i think well have limited Long Haul International travel for a long, long time. Thats why were all so hopeful a vaccine will be found in the not so distant future and clear all these problems away. I want to ask you specifically how the Company Handled the last few months and the challenges you face. I know expedia needed to raise some money and do so at a relatively costly price. Whats your Balance Sheet been like have you had to raise capital . We raised 4 billion. Obviously more expensive than previously were pleased with what were able to do, invest, enthusiastic buying, offerings. People see longterm its one of those things you want to make sure the size of the company is right for the demand you want to see thats something hard to figure out. So dependent on whether or not we get a vaccine in that Fourth Quarter and start rolling out in 2021 or not. Weve been saying the whole time were not going to recover its going to take some time to get back to where we were in 2019. You feel confident you can operate, have the right liquidity and good enough Balance Sheet going years like this with this kind of travel demand yeah. Were very fortunate in that a lot of our expenses are variable unlike an airline that has to play a lease or large hotel that has to pay a mortgage. A lot of our costs are variable. Our biggest expense is marketing. Thats one they can completely control. If theres no demand, as there wasnt a few months ago, we just shut off the tap and say lets not spend money because nobody is listening to a traveling ad. Glen fogel, thank you for the update appreciate the time. From booking holding, especially on a day like today. We have breaking news on caesars, Contessa Brewer with the details. Reporter hey, sara, caesars said effective 20 minutes ago everyone entering any appropriate they operate in the United States must wear a mask they have casinos operating in nine states, more down the pike. It doesnt matter what governors of those states say, if you come onto their property, even passersby, you will required to a mask if you dont wear a mask, you will be directed to leave the property they say we promise caesars will continue to evaluate latest directives and medical science as a result we are immediately requiring everyone in our properties to wear masks the governor of nevada will hold a News Conference. He directed his task force to give him some direction whether he should be mandating masks across the state of nevada gaming regulators in that state had just changed the rules last week to say if you went to a gaming table you had to wear the mask to protect the dealers. The Culinary Workers Union argued back, yeah, what about the bartenders, servers, housekeepers, they should be protected as well. Caesars says you will not have to wear a mask if youre actively eating or drinking on the Property North carolina delivered a directive to wear masks. Makes sense Contessa Brewer. Thank you. Weve got 33 minutes left of trade. We have seen improvement here for stocks the low of the session, the dow down 800 points. Were now down 00. Getting back 100 points just in the last half hour or so s p 500 down, every sector lower led by energy and real estate. Those are the hardest hit. 30 out of 30 dow stocks in the red. Still ahead Ariel Investment said he saw a onceinalifetime buying opportunity in march. Well get his thoughts in light of todays big selloff check out one winner today shares of bankrupt hertz soaring after jeffreys note said auto nation and carmax may consider buying 150,000 used cars from the hertz fleet and that bankrupt company is up 33 to 1. 66. Well be right back. Yeah yyeah yeah hey, hey 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 were committed to making college more affordable. , thats why were keeping our tuition the same through the year 2021. [student] i knew snhu was the place for me when i saw how affordable it was. [narrator] find your degree at snhu. Edu. All the major averages plunging today as states such of florida, texas, and california continue to record huge spikes in coronavirus cases joining us by phone for more on todays selloff Christopher Harvey head of strategy at wells fargo security christopher, i believe in the last few weeks you guys have been adding to your market positions in places like value and small caps to the rising case numbers and moves like today make you question that no, it doesnt make us question that but what we have been doing the last couple of weeks, we have been expecting 5 to 10 selloff we did tell clients to be a little more risk averse. We told them if they could you want to diversify into utilities. We would take this opportunity, if it continues, to start to add to small cap and to value but be patient. Its a walk, not run, type of situation. Small caps and value because they underperformed yeartodate during the Coronavirus Crisis or because they underperformed for the last decade. Are you saying the next decade will see a change from the last one or just a more shortterm swit switch. So what weve been saying is on the value front, these are some of the best valuations weve soon in the last decade. We think theres going to be a shortterm repricing and multiquarter, possibly multiyear reprici repricing. Whats going to make it durable we think it will be very easy, any sort of economic recovery is going to benefit your value, smaller caps, much more than it will your growth, staples as we go forward in time. Comps may be easy to beat, christopher, in the coming quarters in the next few years or months but it still doesnt bring us to levels of activity before the crisis. Still a number of head winds including the fact that millions of people are unemployed how do you deal with those longer persistent economic worries within that optimistic forecast right sara, for now, i think were in this less bad type situation lets take for example, ill use scientific terms i think numbers are going to suck what i think will happen is commentary will be very constructive or somewhat constructive youre going to hear that may was better than april, june better than mare and first weeks of july were okay. What were doing and what were saying is were seeing the real change the economy basically stopped in many parts of the area that reacceleration is very aggressive you dont need much to really get many of these Companies Moving what were doing with the gang is things are getting less bad for now that is good enough. What about u. S. Versus the rest of the world . So we have liked the u. S. For a number of years. We are interested in the rest of the world but not really ready to make that jump at this point in time. Were seeing evaluations in select areas, select countries, select sectors but we still do like the u. S. And we do think theres great valuation, pricing in the u. S. , especially on the value and small cap line. Christopher, what about just the uncertainty over the path of the virus, the fact that we are seeing really economically important and populous states in the country record some troubling statistics around numbers of cases and hospitalizations and what that might do to your rate of change argument, that things continue to improve from here. Thats a great point. What weve been talking about, what weve been saying to clients, if you look at the virus, it takes on a first in, first out. If you look at China National basis. China was the first country in, the first country out. If you look domestically, whats occurred metropolitan area first one in, first one out. Its not surprising to us to see other parts of the country beginning to peak or starting to increase obviously when you open up, you should expect some steppup function in the coronavirus cases. As you point out, or in alaska, i think you pointed out, that people are starting to change their behavior in certain parts of the world or certain parts of the nation, nevada, north carolina, now. I think with the spike youre going to get a behavioral change and thats in the metropolitan area i believe the last number we saw coronavirus increase was only 0. 1 thats good. That said, we monitor, need to be careful about it and we still dont know a lot about it. Im sorry, i cut you off please. Final question, if you had to pick one sector in the u. S. In the s p to buy on this pullback, what would it be it would be industrials. I cant pick one sect r we like industrials and housing market. Chris harvey, thank you for joining us. Thank you. Time for cnbc update. Has hel solomon has it. University of connecticut cutting its sports budget by 15 and cutting scholarships, four programs cut including mens swimming, diving and tennis. They expect the budget deficit to be about 50 million. Even as emergency prices fall u. S. Gasoline consumption is more than halfway back to prepandemic levels, thats according to Oil Price Information service. The second week of april it was down 49 from year ago levels. But by the second week of june gas was down 22 from the same time last year brazilian president bolsonaro is finally wearing a face mask but only after a judge ordered him to do so he wore a mask in brazil where masks are mandatory in public. A local lawyer sued him calling his behavior irresponsible you are up to date thats cnbc update for this hour sara, ill send it back to you. Just 20 minutes to the close of trade were off the lows of the session, down more than 800, still, a pretty broad selloff. What should we be looking at in particular as we go into the final minutes of trade. Its pretty broad it did slow down midmorning, midday and its not come a runaway to the downside. Things to watch, one of the Market Movers in the last hour has been this market on close disclosures about the big funds that have those orders, buy sell imbalance. Part of the reason were now expecting rebalancing flows from pensions away from equities, might have been some drag on that in the next couple of days. Thats one of the things to watch. Youre not seeing too much with themes emerge. You do have things like apple and software doing okay relative to how much they are up. This is 2 off the board skimming across the top. Mike, some other factors to look at. You mentioned the pickup in the vix and got yields low, the dollar higher. One of the odd moves in gold where we did see gold move higher, which is kind of what youd expect but it sold off as if people were grabbing for anything higher on the day. Its funny. Its certainly outperforming if you consider it to be a relative performer on a day like today. Yes, sometimes it cannot resist the pull of all Asset Classes going down when you see oil and things like that as well its holding most of the recent gains. I dont think its necessarily anything like a reversal of the recent strength in gold. The one thing i have been watching, very, very heated inflows into gold and silver by Retail Investors sometimes that means the story is getting out too popular in the very shortterm. It also could mean a return of this reflation trade which basically means stimulus from all places just boosting assets. Weve seen weak dollar, strong gold prices, strong stock prices thats really been the theme, mike as long as the stimulus keeps flowing, i guess the question is can that kind of trade continue even on nasty days like today where there is a lot of bad news underpinning it. I would say that works for gold as long as the reflation is not seen as speaking to genuine economic acceleration because in that environment i do think that gold might be hard to get away from its status as kind of a defensive play the last time gold was at these levels, remember, it was 2011, before you had much belief in an economic recovery taking hold. All right hang on, mike. We want to hit alcohol stocks getting hit hard frank hole and. Maker of budweiser, jonze walker and corona all trading lower on covid19 concerns and what another outbreak could mean to restaurant sales and products they make up a quarter of revenue for brewers and more than a third of the volume of beer and spirits was sold in pars and restaurants and nightclubs prepandemic another wave of shutdowns could really be devastating for spirits and brewmakers who normally see sales pick up in coming months. Back to you. Thanks for that Broader Markets continue to sell off. Were down well over 2 at the moment over 600 points on the dow 2. 5 as you can see. Our next guest says its crucial for guests to build exposure, early stages of economic recovery where valuations are still reasonable Gabriela Santos joins us now first of all, on the selling in the u. S. , what do you think has triggered that i think its a mix of technicals and fundamentals. On the technical side were approaching the end of the quarter with a very strong quarter. We may see some forced selling for investors forced to rebalance. At the same time were having a really strong week of equity issuance i think its also a mexico of just some concerns around fundamentals i think its this constant reminder we have that reopening was the beginning of a new chapter in the covid story but it was not the end of that story unfortunately. Its still something were going to have to factor in at least for the next 6 to 12 months. So within that, it sounds like youre positioning around buying some cyclicals, gabriela. Why is that and which ones so thats right i do think we are acknowledging that were in a much better place today than we were just pa month and a half ago we are actually reopening. We are seeing activity turn less bad, and we have seen significant and continued policy support. But i think its all about trying to manage away from extremes we also dont want to go as a full on into risk as you normally would during a recovery because theres so much uncertainty around the path of it you also want to be picking the sectors, the countries, the companies, frankly, that are going to be able to still survive this tough road ahead. We want to pick cyclicals, where its also backed by fundamentals i think certain sectors in the u. S. , consumer discretionary, financials but also a big story about adding International Think about europe emerging asia they are further ahead in their Recovery Process they are on a more sustained path and valuations are more attractive. I guess not all of europe and not necessarily all emerging asia, what countries in particular. Exactly right we think about europe, we think more about Continental Europe versus the uk. Within europe we do think actually the hardest hit countries during the covid crisis have absolutely crush their infection and rebounding in a sustainable, italy, spain, france as big delta opportunities. Within emerging marks, it is that preference for emerging asia within asia, its north asia, china, korea and taiwan. Gabriela, thank you for joining us. Thank you for having me. Seventeen minutes left of the trade day. Commercefree coverage of all the action on the close. Cnbc markets commentator mike santoli. Weve got with us Wealth Management ceo josh brown with us as well lets get things off stocks plunging as coronavirus cases continue to rise in certain cases in the u. S. Off the worst levels, dow down 859, down 633 or 2. 4 as we stand all 11 sectors are comfortably lower. Josh, i come to you first. Do we view this pullback or extent and breadth of it something that has surprised you . I think its an ongoing feature of the environment that were in its very clear that were going to have these two step, one step back days in the market on an ongoing basis, even despite the fact the overall trend for the market over at least the last 90 days is higher right now what weve done essentially this week is weve given up the gain for the month of june, flat on the month if somebody made that bargain with you in april, youre going to have a month like april, month like may and june is flat, every single one of you would have signed up for that. Lets calm down before we get worked up. The other thing, onethird of trading days throughout the year of 2020 weve seen a 2 or more move in the s p 500. We are on track in the second half matches the first half, we are on track to match the daily volatility of 2008 the big difference being this year so far market doesnt look so bad this will be one of the most volatile years of all time you really have to go back to 1930, 31, 32 thoz tho see thi intraday moves thats the environment were in. Days like today shouldnt surprise anyone. What does that mean you should do about it here is the right answer to your question, sara. For 99 of the people who are watching this broadcast, you should do nothing about it you should not weak up every morning thinking you have an answer to whichever direction the line squiggles you should not think on a daily basis you have the ability to outsmart the other 100 Million People trying to buy and sell based on headlines you do not have that ability you may be lucky at times. You may catch the right direction on a few stocks. Nothing wrong with that. Have fun if youre out there swinging like a home run hitter at every pitch this market throws at you, you will get more wrong than right. Net of taxes, net of trading costs will be absolutely horrendous and you only have yourself to blame. The only advantage you have over the pros as individual investors there are no called strikes, as buffet would have to say you do not have to swing every day. There will be days like this work your plan if you decide your buying on dips, do that. Its very simple. Dont tell that to the day traders. Mike, weve been talking a lot about the different virus numbers. Different. Sure. Well get to that later. I just want to talk about whats behind the selling today weve been talking about the numbers, we saw the reaction to some of those florida and texas and california numbers theres also tariffs back in the news, which i think we should mention, the administration is weighing more tariffs on 3 billion worth of exports from skee allies, germany, spain, uk. This relates to an airbus ruling it could involve peer and all sorts of food. Is that playing into todays sort of mood here . I would say it absolutely doesnt help i think on days like this, you can reach for many plausible excuses for why this obviously was going to happen. So definitely theres a little bit of a nervousness around policy moves that would not be friendly to an economic recovery happening in the context of an Ongoing Campaign or whatever the motivations might be i dont think anyone loved that. The market was kind of down small this morning until you did get those rising covid cases and very crucially when the huge nasdaq stocks were not there to take up the slack. From midday yesterday they seemed a little bit extended and pulling back thats why were noticing the broad weakness today in a market, which even before today the median stock in s p was 20 off the high and no one thought about it because it was obscured by what was happening in the big caps. Taking a step back today, nasdaq down 1. 8 home builder stocks significantly underperforming the market diane olick has the details after they had been so strong, diana. Thats part of it builder stocks reacting to a couple of things, first down yesterday despite a report new home sales in may really outperformed but there was a big drop in supplies so builders are going to have trouble meeting the demand going forward. Then we got Mortgage Applications after five straight weeks of gains they fell. 18 higher than a year ago but any sign of a turn in demand will worry the market. Builder stocks have been on a tear since march and some may consider them a bit overheated were about to get a look at Quarterly Results from kb home in the next hour so see what the comments are from the crowe there. Sara thank you josh, this had been a bright spot housing demands, Mortgage Applications, was that the peak or keep buying those names i would say its an opportunity but i dont know youll be rewarded right away. Here is what i want you to think about, we now have a moving average increasing in the United States the places its taking place are some of the hottest, robust markets in america, california, arizona, texas and florida this is where the home markets are the best thats a tough situation for stocks might be reflected in things like new home sales. Bigger picture when we get through the pandemic and we will the most popular time to be is 29 years old that is prime household formation age. Its mega trend, secular, it will defy the shortterm blip from the pandemic. Number two, very quickly, Interest Rates are very low and we just dont have enough houses so we cannot build them fast enough for the demand. The pandemic might be exacerbating that. If you think about supply, almost unlimited funding for new purchases, and you think about demography, i think youll want to be in these stocks not out of them. How good an indicator is housing data for the rest of the economy . Its good in terms of insulating the economy from its steep downturn of housing thats strong i dont think its always going to lead us in or out of something. Its a very strong offset because it does move according to things like low Interest Rates which are countercyclical and of course we have big supply and demand one thing, 29 is always the most popular age to be but right now happens to be the most common age in the United States, which i know thats what josh meant. Popular age to be all those people 28 and 30, they cant stand it lets move on and talk about the banks which are down sharply for the market, down 2. 4 and banks down 4 . Yeartodate for performance from kb banks 35 below s p 500. Banks had benefited from late may, early june rotation into cyclical value stocks but were down close to 20 since the 5th of june. Why is that . Firstly, rotation reversal particularly days like today when virus fears resurfaced. Two, Interest Rates and commitment chair powell acted as extra blow for banks on top of the sector rotation. Then there are a couple of specific events coming up. First stress tests, the results are due tomorrow finally earnings due the second week of july not necessarily imminent but more important than stress test results tomorrow well see at earnings scale of bad lobs once again and can expect significant differentiation between the Different Companies this time around for a snapshot of that, by the way, look at Morgan Stanley versus wells fargo, which yeartodate you can see one down 50 the other was flat for yeartodate performance some stark differencesthere as we stand for the banks. Here is my question about the stress test. I know they are going to incorporate some type of covid element to the testing didnt banks go through stress test in realtime when we went through this pandemic and crisis and now were going to see gdp print in this country that could be down 30 to 40 during the quarter. We saw massive volatility. Just wondering what the fed will test them for thats different from that and how the banks will ultimately fare coming out of this. We got a guide, the qualitative aspect related to what weve experienced this year the stress, as you say, meant to test for scenarios like this the difference is the pace with which we reach these headline grabbing unemployment numbers or whatever it might be that may have featured in the stress test but not the pace thats why they are laying in factors. The key for the stress test its not a typical pass fail. A new criteria, stress Capital Buffers and were not actually going to get the clear results of that until next week when the banks having been told yesterday by the fed how will release that data in the marketplace. Whether or not to see dividends canceled tomorrow, thats not expected until the next couple of weeks unless the fed really wants to step away from the pure numbers and get a bit political, they are not expected to enforce cuts in dividends. Dont forget buybacks had made out the vast majority of the capital return programs and thats already been scrapped apart from a couple of individual names like wells fargo, it would be a surprise to see dividends cut, though thats a possibility. Wells fargo the expectation they will not do it except earnings a couple weeks from now. By the way, banks under pressure as they have been of late. In large part, mike, because of a rotation as opposed to anything necessarily stock specific. Thats right. I mean, its a rotation away from stuff that looks cheap. That also was probably tied to the economic pace right now. A look at a relative base, banks with s p 500, they are off the lows, multiyear lows for may but not by much. Maybe tomorrow becomes a little bit of a lift of an overhang with this stress test news. Hey, guys we didnt have a stress test for the banks. Instead we had a test of universal basic income it turns out the Business Community and probably banks love it. We sent 1200 per household to the people that would have been most likely to default and as a result they arent going to. We might even extend that an extra unemployment benefit of 600 poverty actually went down by one measure during the course of this pandemic and a lot of people are earning more on a weekly basis than they did prior to the pandemic starting we actually tested andrew yangs Economic Community and it turns out the Business Community likes it so i would say its the opposite of a stress tess we put forbearance in place, stopping people from getting for closed on. So its good banks took these big numbers into their reserves. Well see if they have to use most of that money if they dont, that will get returned to the bottom line. To that point, quickly add, apart from stock specific issues when we get to earnings in a couple weeks time, the tone from most bank ceos two or three weeks ago, a slew of conferences and heard from management teams was pretty positive relative to where share prices were today. Kbw up 90 at the start of the month when we were hearing positive comments from banks, now its back down again well have to wait and see maybe change the tune. Maybe things have got worse since the start of june. If they dont, you might see a reprieve when we get to earnings. Lets watch the cruise talks, they are getting crushed seema. Youve seen analysts from different sell side firms figure out their numbers, no sailing means. Bringing down estimates for norwegian, worst performing today and royal caribbean. Then you had the Credit Rating agency s p downgrading to junk status thats an inconvenient time for the cruise line which last week said it would look to raise further capital. That report that eu could bar travelers due to the rise of covid19 cases, that got a lot of attention as part of the reason were seeing hotel stock under pressure today there are implications for the cruise line as well. In fact, sara, last week following announcement the carnival spokesperson telling me they are hoping to get european sales back to market to the u. S. If it goes through, that raises questions whether that can come true. Seema mody, thanks. Josh, i dont have to ask you, i know youre not a fan of the cruise stocks. The recent action, what does it tell you now that we know they will push their days farther back spot fall how cheap are these stocks they are not cheap. Go ahead, josh. I would say they are not cheap, cheap on the basis of what the value of their assets continues to come down and the potential earnings continues to come down. So its really hard to use the descriptor when you dont know what its applied to, its melting away faster than sentiment. Its a very, very tough space. I dont know what to make of these and im not involved. Stocks tripled off the lows because they were basically priced for stings, given back a third of that gain they trade like call options on maybe well sale early next year a lot of stranded capital, if you consider how much debt they have raised and all they are doing is burning through it as they dont take customers on. Mike, weve got just about two minutes left what else are you seeing in the internals. I knew you didnt like them. Thats why i didnt go to you. Pretty lopsided 90 of volume downside of New York Stock Exchange all day. So thats not necessarily something to be encouraging. Take a look at one of the more focused reopening plays, ctf entertainment, leisure stocks actually a little intraday comeback, underperforming significantly, down 3. 1 down much more earlier. Then if you look at the volatility index, stubborn, back into the mid30s thats looking like another hook higher its not cooperating with the idea this market is in the clear. Its a little bit of a staticy backdrop as we work through this two or threeweek pullback. One minute left of the trading session, lower across the board with 2. 5 on the s p 500, a little more than that on the dow. Points back down 700 down 859 at the low. For the last hour trade has been 600 or soso weve added 100 points or so to the decline in the final hour of trade. The nasdaq a relative outperformers down over 2 itself and russell 2000 in small caps down 3. 4 every sect or lower, energy down 5. 5 as Oil Prices Slide some 6 today. Utilities is the best performing sector but it is down almost 1 itself weve also got a stronger dollar up 6 , yields falling back below 0. 7 on 0. 69 handle. Gold is higher, as the belle goes for the equity markets we are down sharply across the board 730 points on the dow or 2. 8 and s p down 2. 7 and nasdaq down 2. 2 . Since june 11, hasnt been that long. Welcome to closing closing be. Take a look at how we closed on wall street. Tough for bulls. Dow closing 708, off the low down 800 points a pretty broadbased selloff, 30 stocks lower. S p losing 2. 5 . Hardest hit energy, industrials, financials, also beaten down hard utilities down 1 the nasdaq breaking its long winning streak this is the first down day for the nasdaq in the last nine. Worst day since june 11th for the nasdaq, puts it up 3 . Definitely big tech took a step back and that weighed on tech. Russell 2000 hit the hardest, down 3. 5 , and it is still the worst performer for the year they are down 16. 6 . Coming up this hour, a trio of huge interviews for you. First, we will ask famed investors john rogers whether hes worried about the markets current evaluation and talk to the ceo of slack to discuss the outlook of working at home amid new virus outbreaks. A new feature allowing easier communication between companies that they Just Announced today first joining us to talk about the selloff, management ceo josh brown still with us. Mike santoli, first to you on what happened today and what you make in terms of how could this could be with us the market has tried and failed and used energy toward the highs in early june. It hit a bit of a ceiling there. I just think the cumulative effect of the day to day worsening of the infection news and very routine pullback in big tech stocks in the grand scheme of things was too much market did not fall apart, held above where we traded back right after that bhig selloff on june 11th we held above 200 day moving average. Its not as if it changed overall complexion except to reinforce the idea highs from early june may not be too easy to get back to remains a twoway market at this point. Credit markets also did soften up today it wasnt really just stocks that were taking some off the top. Josh brown, you said earlier people should stick to longterm game plan, if that included buying on the dips they should do that. If you bought on any dips today . Were doing that systematically there are accounts weve bought stock for pretty much any day of the year bigger picture, one of the things were trying to explain to clients on an ongoing basis, this is a common theme, just this idea the reality they see around them on main street in small and midsized businesses has very little bearing on whats happened in the stock market on a daily, weekly, monthly or even sometimes an annual basis its really, really important to be continuously reminded of that, because of these headline scares that were getting, resurgence in cases. The next thing you hear are masks are mandatory. What you hear after that is, yes, we reopen the economy in certain areas but people are refusing to come out because they dont believe their neighbors are taking this as seriously as they areor they dont believe the threat is being adequately explained by federal government, State Government as that process plays out this summer, its going to be scary but that is not in and of itself a buy signal for the stock market keep in mind how Big Technologies and Companies Either less effective or benefiting from this are in the scheme of the indexes. All these little companies we talk about casinos, cruise lines, add up market cap its irrelevant. It doesnt even matter have you to be reminded of that as investors, and its our job as Financial Advisers to continue to remind clients the market doesnt have to make sense to you based on your lived experience it doesnt it hasnt all year, quite frankly. A lot of people have said that look at hyg, etf that attracts highyield bonds youve been looking at correlation between the credit market and stock market. Its been underperforming all week matt pointed this out. A huge indicator of the stock market, tested its lows this morning. I think, mike, we have to watch this to see what the stock market will do later why is the credit market so key. The premise for where evaluations will close reduce the cost of corporate capital, risk appetites, look at hyg, credit spreads compared to treasury etfs and thats kind of no better in terms of the level than it was back in april when the fed said they would buy lower rated debt its something to watch. I dont think panic levels there is a drum beat of corporate bankruptcies that continues to go on its not really kind of a rush but its a steady drum beat. All these things definitely are concerns the market would not really change the overall setup of things if the stock market continued to kind of go down 3 and 5 , thats still in the zone of routine pullback. The problem is it would be accompanied by all this nasty news because every day is accompanied by nasty news so you would think its the start of something worse on the downside. Maybe it would but not necessarily. We talk about the cyclicals, that pulled back because of the spikes in cases. Which of them do you like for the longterm . You used to own a couple of banks, would you be buying those on pullbacks i would i think jpmorgan under 100 is a standing buy i bought the stock here before and the reason i feel that way is these types of crisis, you shouldnt expect banks to leave us out thats the the place in the recovery that financials typically outperform but you should expect a lot of the types of shadow banking and shadow lending that had become popular prior to this episode to decrease banks like jpmorgan that are well capitalized, that know what they are doing, that will stand and buy assets when others pelt away into the ether, those are the companies that will benefit the most we saw that after the last crisis you are now getting paid 4 dividend yield to endure volatility in jpmorgan not terribly high relative to sector or overall market. Youre paying 10 times earnings, which is the low end of the range and extraordinarily cheap any way you look at it, whether on an absolute basis or relative to other stocks, other sectors i think the slight premium you pay jpmorgan versus other large cap banks is something that makes sense given how well the Firm Operated in environments like these in the past thats a stock i think on an unqualified, unconditional basis you can just buy it. Will you be rewarded the next minute i cant tell you that. No one can i think youll do well if you look for highquality Companies Like that. If they are cyclical, you may have to wait a while but i think it will be worth it. Josh brown, thanks for joining us today always good to have you. Sara eisen, love joining you. Im glad its mutual. Our next guest called the march selloff a onceinalifetime buying opportunity that was back march 25th just two days after the market low. Despite the plunge in stocks today s p rallied nearly 25 since that call, up 40 from the lows joining us is john rogers ariels chairman that was such a prescient call, im onering how you feel today, a down day, 2 from major averages is it denting your optimism to have these rising cases across the u. S. As you know, were longterm investors. We did think it was a onceinalifetime bargain on the march 23rd when things were cheap and people were throwing away stocks. Today they arent as cheap as they were but there are still a lot of bargains. Were still leaning in and buying we realize headlines are really, really bad in certain regions. I do think the one great things is we do have a playbook we know if we socially distance, wear masks, we can control the virus. That gives me optimism the states spiking will slow down over the next few weeks. Given the call you made in late march, did you go to zero cash have you had a great quarter in terms of performance we have been outperforming in our core, small, and midcap value stocks that weve been focused on at ariel for the last years. Weve been fishing in the same fishing pond it has been a good year. Weve been outperforming on down days, which makes us feel really good and holding our own on the up days. This is a great period for us. Much stronger than 08 and worst year in 37 that 2008 period because so a dramatically difficult. Even though weve seen kind of a nice run for value here, john, and you can speak to that in your portfolio, there still is this question about growth versus value and the fact that the big megacap tech names continue to lead this market S P Information Technology index relative to s p in terms of performance is the highest its been since 2000. So what does that mean for value . Ive been talking to a lot of old friends and peers, who watched a lot of markets, people like ralph wanger, legendary investors from acorn funds t bill miller. When you talk to the grizzled veterans who have been around a long time they will tell you, this has been big heest discrepancy in value and growth that weve ever seen its dramatic. I think we all feel like its way, way overdone. Value is so cheap relative to growth this is going to have a real, real big shift coming. It will kind of remind us what happened after the internet bubble burst where value came roaring back and did he sfroid Growth Companies we see that same kind of opportunity ahead sometime hopefully in the near future. I guess, john, that did happen afterthe dotcom bubble burst but it didnt last that long if we consider the last decade, as you pointed out, has been bad for Value Investing compared to growth investing, do you think the next decade will be good or were due a couple quarters of a pivot. I think its going to be long lasting. Weve suffered enough, suffered too long. These low Interest Rates have made the value of Growth Stocks more enticing for people those future earnings are worth a lot more when you have these historically low rates we think the next decade youll start to see rates creep up. That will be good for investing. If the economy recovers that will be good for value stocks. We think this could be long lasting, a real Good Opportunity today. So name some names for us, john is it still old favorites like kkr, make tttel, or new values. Both. Kkr is large position, total confident in the team. I was on the phone with ceo of mattel a lot of confidence there. They have a new cfo in place we think they have the turnaround on track. Tremendous ip utilized in to 21, terrific also theres been great new ideas out there. My favorite is envista, the dental Products Company known for great products people have to go to the dentist again. Theres been a lot of people waiting to go to the dentist and probably need to get back there and get things repaired. Thats a great bargain here, great value. Vail resorts, another one interesting for us it got crushed when the Spring Season got decimated it got hit pretty hard if you think about it, its the perfect business to come back. You think about it, if youre wearing your skis, youre automatically socially distant for 6 feet youre used to Wearing Masks when you ski we think they will come back stronger than people anticipate as they move into 2021 didnt think about the social distancing while skiing. I want to fog up with mllow up. This has been a tricky one since before the pandemic. They have been trying to sell the idea of intellectual properties and movie but thats where its going but its still a manufacturing company, rock and play recalls, thomas train accounting errors. Why is it going to be different for this company now at such a hard time economically when were in a recession you know, it is an amazing story. They went through one ceo after another. The board did not position themselves well from the Capital Allocation decisions they made they paid far too big a dividend they had heavy manufacturing throughout the world they had not gone to the capital model hasbro went to its gone to that capital light model which we think will generate much more profitability throughout the year and gives you a big, big cushion they have also focused on turning around American Girl that area has not done well for them but thats a great franchise, has a lot of internet opportunities where people will buy the dolls over the internet. Of course barbie and hot wheels continue to be terrific. So i know they have talked a good game. They had one crisis after another. We finally feel like they have the right team in place to drive profitability, drive growth and the value we think is more than double the price and a lot of smart investors i respect have been involved in this company. John, as weve discussed, you successfully saw there was great opportunity in march and bought more equities there rather than got spooked by the headlines, though not all Institutional Investors particularly value Institutional Investors did the same famously as we discussed on this network, Warren Buffett sold out of airlines in march, sold a large portion of banks we dont know if it was all of his banks or not prompted an article titled has Warren Buffett lost his touch in what would be the answer to that question i know youve been a big holder of berkshire hathaway. I hold it personally. Its too large for the funds i manage but i have extraordinary confidence in warren hes the greatest investor of all time theres no way hes lost his touch. He has this innate to see the future in ways no one in history has been able to do. He also has that ability to be contrarian when necessary and buy when others are fearful. I think theres no doubt in my mind that warrens gifts are still there. Hes learned from all of his experiences. Hes a better investor today than he was 30 or 40 years ago. How do you explain how hes bearish and youre bullish. Im not necessarily saying hes bearish at the annual meeting which we go to every year and this year did it virtually, he talked about how the magic of america is still here. We have always found a way to solve our problems in this country and the country will be stronger five years from now, ten years from now well get through this pandemic the way we got through the last pandemic last century. The political turmoil weve had recently, weve gone through that in thepast. I have confidence in the future of america, magic of capitalist democracy. Warren reminds us to think longterm, not get swept up in shorttermism that so many people do. So many dont understand the market, very bearish today i think we look out over the horizon, were going to have a great, great recovery. John, should note that mattel shares are surging 5 after hours on some of your bullish comments i want to talk about your other job. You sit on the number of really powerful boards, Companies Like mcdonalds and nike. I wont ask you about earnings tomorrow but just want your gauge of the feeling and mood in the boardroom right now and how optimistic or pessimistic it is around this pandemic and the economic fallout that were looking at as a country. Im very fortunate to be on these iconic boards and New York Times which is another great, great brand when you talk about those two specifically, mcdonalds under chris kays leadership theres a lot of optimism. He brought energy. Jo joe erlanger the ceo of nike off to a good start. I did an interview last week, we were talking about diversity issues its a company that gets it. Truly a 21st Century Company has products for 21st century and model for this century theres a lot of confidence. These new Young Leaders are both companies. I dont know rogers, thanks for joining us. Thank you. Gold hit the highest level in eight years early today. Up next well have a look at what that could mean for the Broader Market as we return. Welcome back kb homes back with earnings. Diana. Kind of a mixed bag, sara came in on a beat with earnings per share, 0. 55 versus estimates of 0. 49 revenue down 914 million versus estimates of. 06 billion came down a bit. Increase in the housing growth margin thats why earnings are higher ceo said the company temporarily closed all its operations in march, opened only by appointment in april and reopened more broadly in may but he said covid negatively affected growth orders and net orders and elevated cancellation rate this is a big number cancellation rate soared to 43 from 15 was the normal. Part of that was making sure buyers were qualified to buy these homes. They said they will not be giving guidance in this report but will on the Conference Call later. They did say while improvement began a little bit in may, that this improvement accelerated dramatically from june thats what they said from builders, they did see dramatic improvement. Aics maked bag on kb home coming in heavier on eps and lighter on revenues. Lets get to mike and gold, highest level since 2012 mike. Certainly gold on a good run. Often the question with gold performing well relative to water. This over at Wolf Research shows gold against real Interest Rates. Inflation adjusted Interest Rates. Interest rates are inverted. As the Interest Rate line goes up, means its getting lower negative rates coincided with strong over time you believe feds keep rates at zero as they told you, inflation is going to stay where it is or go up, it would suggest a tail wind for gold price. Another way to look at the last decade in gold is relative to s p 500. This is where it is. Gold is enumerator and s p is denominator. See that, thats the whole debt ceiling debate and sovereign debt crisis back in 2011 that was the prior peak, steady down since then but maybe bottoming here thats the bull case on gold, too. Theres room for it to keep appreciating relative to things like financial assets. Also, though, it does make it look like it has been something of a lost decade on a relative basis for gold and see if that can turn around here. Are you surprised bitcoin hasnt broken above 10,000 with the strength in gold i give myself permission not to have strong views on bitcoin. I still think its okay to ignore it to be honest with you. I couldnt say im surprised by it it hasnt seemed to adhere to what you think would be the macro rational when it should and shouldnt perform. It doesnt surprise me that much. I didnt give you permission to ignore bitcoin. I gave myself permission but i remain at your service so ill form an opinion soon. A record jump in florida, well ask the mayor of tampa next whether shes considering new lockdown restrictions to slow the spread there. As a reminder watch or listen live on the go on the cnbc app well be right back. vo since our beginning, our business has been people. And their financial wellbeing. 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 purpose, strength and a way forward. Today. And always. 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. Disney, one of the biggest losers in the dow on the reopening of theme parks, Julia Boorstin has the latest. Julia. Sara, 8,000 people signed moveon. Org petition calling on disney to delay july 12019 opening of disney world in orlando until there is a decline in covid cases this comes after a dozen unions representing some 17,000 disney land employees in california wrote to governor gavin newsom saying they still believe its unsafe to reopen the park. Disney saying the safety and wellbeing of cast members and guest are at the forefront of planning and we look forward to continued dialogue with our unions on Extensive Health and safety protocols following guidance from Public Health as we plan during phased reopening. Disneys park opening kbigest division by revenue and most powerful driver of bottom line froth last year so theres certainly a lot of pressure on disney to make sure that both its employees and consumers feel comfortable returning to those marks. Disney shares down 4 today, sara back to you. Ill pick it up thanks so much for that. A Regional Travel advisory put in place today the governors of new york, new jersey and connecticut require travelers from coronavirus hot spots from florida to quarantine 14 days. The governor of florida. Thanks so much for joining us. My pleasure thanks for having me. Mayor i guess my first question, broader picture, when we see cases spike in tampa, florida, more broadly, given people are more educated today about coronavirus today than they were three or four months ago, who takes responsibility for that is it the individuals or leaders like yourself of the regions that are seeing these spikes well, i think theres enough responsibility to go around, but the spike in the ages from 25 to 34 really coincided with the states opening up of bars in our area and clearly throughout the state. Youre blaming the governor. Im not blaming weve got a spike were dealing with and we put a mask order, the city of tampa, in place. As im sure youre aware, the Research Shows if everyone wore a mask for two weeks, we could cut down 80 on this virus so weve had great adherence to that mask order. Weve passed out over 200,000 masks since this past saturday. Are you considering closing the bars and businesses already, restaurants closing themselves because of the rising case numbers . Weve had a couple of restaurants close. We have great weather. When restaurants started opening slowly at 50 capacity we did a program called liftup local and closed town streets and allowed the restaurants to move tables outside in roadways and sidewalks and other locations. Its difficult to do with the bars the governor has arrived that the statewide Alcohol Enforcement Agency will be suspending liquor licenses on the spot if bars are found to be in violation of the restrictions that have been put in place. What do you make of the new measures announced today by Governor Cuomo about requiring a quarantine for 14 days for individuals that travel from your state is that something you can understand given the differing infection rates or do you feel like its unfair, antiamerican even. Actually our state did the same thing with individuals coming from new york i look at it more of a position of effectiveness you just stop someone and give them a piece of paper that says quarantine yourself for 14 days and you have to downtown on those individuals for doing that so you know, the governors take the steps they feel necessary. Im doing what i can locally to protect our community. Madam, mayor, you now have the g. O. A. T. Of football playing for you, tom brady are you ever going to be able to host a game where the fans can see him before we get a vaccine . You know, i dont have the answer to that what i do have the answer to is that we are hosting the super bowl come february, and we will be the first host to hoist the lombardi trophy as a hometown winner of the super bowl that im looking very forward to. Strong conviction there, big prediction mayor, thank you so much for joining us. Thank you very much i appreciate it. Trade trouble up next well ask valerie jarrett, former Senior Adviser to president obama whether contradicting statements from the Trump Administration about the china trade deal are a real risk to the market or not. vo at whether on the track,that exhor the everyday drive. Ty, today, that philosophy extends to how we connect with you. We call it, audi at your door. Whether a remote test drive, shopping, tradein, or even service pickup, audi at your door can do this and more at participating dealers. The premium audi dealership experience, on your terms. Audi at your door. Stocks having their worst day in nearly wo weeks today bob pisani is breaking down the biggest movers today bob. Hello the story has gone from a positive to a question mark. You can have a downturn in tech and have a question mark apple has been up a month and a half, go down 5 , 8 and not have a problem but not true in other areas like industrials a lot of v shapes. I keep pointing out inverted v shapes, raraytheon, 64, 71, thas a v. Exxon 45, went to 55, now 45 again, sitting near the lows same inverted vs for the banks waiting for the stress test concerned about dividend cuts. Jpmorgan, 42, then back then stocks that never had inverted v the pop of three or four weeks ago a lot of consumer names like Johnson Johnson. Look at this this is the lowest level for Johnson Johnson since april. Well see about the open tomorrow its hard to put together two down days. Thats been the good story about the reopening story. Well see if that happens tomorrow guys, back to you. All right, bob, thank you the u. S. Weighing the possibility of additional 3. 1 billion in tariffs on products from the united kingdom, france, spain, and grermany latest between the u. S. And Global Trading partners. Peter navarro said u. S. China trade deal was over. He later clarified his statements saying it was taken widely out of context and a deal was fully in tact. Joining us now for more valerie jarrett, former Senior Adviser to president obama, also the author of finding my voice, when the perfect plan crumbles the adventure begins. Good to have you onthe show. Welcome. Thank you, sara pleasure to be with you both. I just outlined mixed signals on trade relationships right now. Uncertainty around covid19 with rising cases across this country. What would you be advising businesses to do in this environment. When i was a point person for the Business Community and the Obama Administration the one worth that i heard over and over and over again was certainty the Business Community claims that at a time when we are in uncertain time with global pandemic, challenges were facing, trying to rebuild our economy at the same time as we have tensions and racial tensions spilling over, theres a lot going on in our country that causes uncertainty. I think what the Business Community wants from their leaders is provide as much certainty and consistency as possible so they can figure how to dig ourselves out of this very, very deep ditch were in. When it comes to trade at least, valerie, yes, theres been a lot of uncertainty. No doubt about that over the last couple of years to some extent has that been warranted when you see clashes with china did you ever look back and think we should have pushed harder on china ourselves. Hindsight is 2020 what you referred to, within one week the reversal of positions that independent coukind of swe for our business or our reputation around the world. We should be speaking with one voice from the administration. It should be consistent. If facts change, of course, you might have to change course but nothing changed this week and you see the reversal we just saw. President trump has begun his campaigning, holding his rallies. Hes still hitting the trade theme hard there is angst against china for covid19, the economy. Does Vice President biden need a better china narrative no, listen, i think Vice President biden is just what our country needs right now. Not only is he going to bring us together internally in our country as opposed to separating and polarizing us with divisive and oftentimes racist language but i think his reputation with World Leaders is outstanding im looking forward to the United States getting back to a position where we are that beacon of hope, that democracy we can hold out as a model and we are as good as our word and appreciate the Important Role our allies play. The challenges we face right now cannot be attacked in isolation. We need Global Cooperation i think Vice President biden with his long track record in experience both in the senate and eight years as Vice President is the perfect person to help heal our country and improve our status around the world. What about on taxes, valerie. Increase in taxes is never popular but would it be the right thing to do in certain areas, maybe reverse tax rate cut or Capital Gains taxes slightly given the stock market rebounded so aggressively and the economy perhaps still lagging behind. Well, look, i think the economy, the foundations for this economy began as we came out of the recession of 2009 and the steps that the Obama Administration took to, as i said earlier, get us out of this ditch. I think what Vice President biden will do is look at all the tools available to them, including the tax code, to say what are we going to do to increase opportunity here in america for more americans to have good paying jobs. What are we going to do to retool jobs for the future and what are we going to do to make sure our tax system is fair and equitable. I do think exorbitant tax relief to Corporate America under trump didnt make sense. It wasnt something the community was looking for. I think Vice President biden has a fresh opportunity to are you build, what are the levers he can turn at the federal level working with congress, that will rebuild a new economy, not simply go back to where we were before. Do you think if he does he should push to roll back salt and hit states hard hit by covid . These are all food questions. I leave it to Vice President biden and his Economic Team to figure it out. What i have heard him say clearly is we need to rebuild in a way thats fair to everybody for example, many of the states hit hard by covid, we have to figure out how to rebuild those economies but we have to look at Health Disparities laid bare as a result of covid. What do we do to ensure all americans have access to Quality Health care and close those gaps weve seen particularly in the africanamerican community. Valerie, i wanted to ask quickly about the black lives matter movement. Clearly its been a jarring couple of months we could assess all day long exactly how the last couple of months have been handled but i wonder whether you look back as a movement that has been going for a long time and wonder whether more progress on it could have been made during the Obama Administration. Well, look, we certainly brought this issue front and center we had a Justice Department that looked at the tensions between police and communities of color and went in to see patterns and practice of discriminatory behavior thats a tool no longer used by this Justice Department. We brought 25 investigations during president obamas watch we had tools in our Justice Department to help implement the 21st Century Task Force report that provided a blueprint, roadmap for what local Law Enforcement agencies could do to try to build trust between themselves and communities of color. Unfortunately over the last three years all of that hard work has been abandoned. I do think as you alluded to, many of the tensions building up now and coming to the surface have been building for generations. This is not something that necessarily has a quick fix but the good news is this. Weve seen people mobilize on the streets to protest, mostly peaceful they have been banning chokeholds, looking at how are we training officers to make sure their backgrounds pass, ready to hold themselves to the High Standard we should have for Law Enforcement, that were not asking them to do things outside of their scope, teaching them deescalation, looking at implicit bias. So many things we could do the other heartening data point, the Business Community has not only had a wakeup call about policing communities of color but they are not challenging themselves to say whats our role in this if we believe diversity is a strength, do we have inclusion what more could we do with buying power to open up opportunities for those left bin. That challenge will have a Ripple Effect around our country as well. Its heartening to see the vast majority of americans the polling ive looked at support the black lives matter movement, recognize its fighting for inequities that have not historic and were coming together in a way we have not seen in my lifetime. Im old enough to remember the civil rights movement. As herculean as that was, it paled in comparison to the actions we are beginning to take there is no quick fix to this. This is something we have to put into practice both in terms of preventing discrimination but also changing the hearts of america. I think that soul searching is under way. The question is, is this an Inflection Point or the beginning of a turning point i feel optimistic its the beginning of a turning point. Valerie jarrett, thank you for joining us appreciate the time. Slack has been major work from home play, up so far this year today announced a new product allowing up to 20 companies to chat on a channel. Talk to slack ceo beauty its competition and the future of working for microsoft. Thats coming up 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 tswithout even on pryoleaving your house. Ant just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. President Trump Holding a News Conference. Lets get to the headlines. Joint News Conference with the president of poland, the first foreign leader to visit the white house since the pandemic began they discussed a variety of agreements but specifically talked about the plan by the United States to relocate some 10,000 u. S. Troops, the 500 troops from germany elsewhere. President trump reiterated his plan to move at least some of those troops back to the u. S. Others he said would be going to poland he suggested the bill would be footed by poland the polish president said he urged President Trump to maintain that presence in europe and make a whole say drawdown. Thank you the dow plunging on heightened coronavirus fears. Down 400 points. Up next, well speak to the ceo of slack what hes seeing amid work from homeur sge outlook as some states reopening. Back after a break yeah yyeah yeah hey, hey while the future of work 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. A standout performer in the shift from working from home, up more than 40 year to date, the company out with a new product announcemen announcement, introducing slack connect. Great to see you thanks for joining us. What exactly does slack connect alieu you to do that wasnt possible before. Great question. Its a little bit abstract the way its showing up for customers is in channels shared across organizations, also in direct messages that happen across organizational boundaries we give you the power channels and simultaneously increases the security, your ability to remain compliant in different regulatory environments. Its very unusual. We always ask you about the competition with microsoft do you see this as giving you an edge there the analysts still question how long the growth rate can be for you in the market and so entrenched in the Business Enterprise software world. We look at everything in terms of the value we create for customers. This further accentuates the difference theres more evidence which is theyre not really comparable products i dont mean one is better and one is worse theyre different. If you look at zoom and slack, this is what happens when you unbundle unified communications. Zoom is webinars and Online Learning and recruiting. Were taking messaging in a different direction, which goes beyond the one to one direct message or instant message that people are familiar with and uses conversations in channels with a lot more accessibility and kind of up levels the functionality. In comparison to email, slack messages are dynamic, they can improve user interface all that is a bit of a mouthful but what were doing now is allowing that channel based communication to happen across organizational boundaries. If you have a thousand employees, theres probably 4,000 people at external companies you speak with on a regular basis. This is for ongoing collaboration. Is it making slack more of a direct rival to traditional email in a way . Its always been an alternative more internal company communication. Does this take this a step further . Yeah. Slack connect is our answer to the question how could we improve upon email and how could we improve upon email specifically for external collaboration. Obviously weve been doing that for internal communication for several years. We have 122,000 customers around the world, large enterprise, small, corporate, nonprofit. This is a whole new avenue if you take the email supports that are better supported in a channel based messaging platform, you simplify the challenge with email is its so many different use cases. Last quarter you added 90,000 customers. Whats happened since then as the economy has started opening new this country i dont have any kind of update for you on the numbers but i would say kind of stepping back more broadly its a really interesting time to be running a company. Obviously for Companies Like ours theres a big tail wind of increased demand and increasing position and usage, but we have 122,000 customers. Many are small businesses. One way to look at it is strong tail winds, theres head winds, it creates a little bit of turbulence the good news is the demand for the product at a fundamental level has unquestionably increased. We have advanced down this pathway of inevitability as long as you dont believe that the world is on a oneway path to the dark ages, there will be a recovery and macro considerations are gradually dissipating. Thank you for joining us. Up next, we are looking ahead after what was a wild day on wall street tomorrow is shaping up to be another big one for investors. Well tell you what to watch after a at leaf blowers. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Date its had five price target increases from analysts just this week. The bar is pretty high. Its annointed as the winner along with lulu. It went down for a moment 40 from the highs in march. That obviously was just seized on by the buyers there big selloff today well be watching if its two which we havent had for a no, weuchavent. Initialk claims and continuing going to be in7 focus. Fast money k0ext. n imrj melissa lee. 3 comingjup, the chart master s not one, not two but the three most defensive charts in the entire market right now. Carter worth lays them out straight ahead why the next 24 hours could be a major moment of truth for the big banks. Why options traders say just buy nike ahead of tomorrows report. The s p 50