Just about 1. 5 for everything nasdaq not quite add bad russell is down. You see the russell is down 3 really taking it on the chin this week. Steve, i think its constructive on a friday and maybe we should make it a consistent thing at this point given whats gone on in the markets to take stock of where you think we are today and how we should look forward to the week ahead. Friday has been a risk off day. Doesnt look like today is any different than others. I think actually the market is trading on physical theraa fairm today. As a share holder, im support that most important right now is to worry about employees and the communities in line with the business round tables statement that they put out on august 19th of last year i think that would give everybody comfort because the number one thing we have to worry about is the economy and that will help the consumer come back youre talk about Big Companies coming out like bryan monahain said earlier that they will have jobs not to mention the current employees of bank of america and some of these other firms that are keeping their employees. As we have been talking the whole time kramer has led the charge in this hashtag no more layoffs thats what youre talking about. Exactly they put shareholders last they put employees, communities ahead of shareholders nap was the right thing to do. As owners of more than 50 of every publicly traded companies, the passive in terms, blackrock and vanguard leading should say to companies we want you to worry about those higher up in the food chain your employees, your suppliers, your communities take care of them first. We think long term we think ten years thats what i would like to see. I think the mark we trade up at that point shannon, tell me where you think we are in the market at the current time again, coming off a week that was huge to the up side. Now well likely end to the downside this week we try to figure out where we go from here. The challenge here isthat w have seen the positive impacts of the fed already and were looking for that positive economic stimulus. I see a lot of historical working done over the course of the last several weeks looking at when the bmarkets bottom versus peak bottom claims or the lowest levels of the ism if youre looking for Economic Data to provide you with this path, we have seen such a rapid deceleration in data i dont know that its an apples to apples comparison were look at the parts of the market that have caused some of the dislocating impact when we saw the vix, spike, it was based on we saw the sharp declines in energy we saw some Short Covering i think we were moving into, perhaps, still elevated volatility period as represented by the vix i think that what were looking for now is that its going to be more looking at the underlying companies. Looking at Asset Classes and reallocation and not calling the bottom here but the ability to put some capital back to work for longer Term Investors. I think equities look attractive i think we need to be more comfortable this is a two quarter Economic Impact and therefore you know we can start to model that out as we get this Economic Data. The other side is what Morgan Stanley talks about when we they talk about deeper drop, slower climb. Were talking as if and shannon just mentioned, in her eye thrks is eyes, this is a two quarter situation. What if its not its not a two quarter situation. Id love to be wrong but i dont think i am one of the most important roles that a money manager plays is not just what the the performance, whats the volatility a lot of that is math. Its about setting expectations. One of things i talked about with an all clients call was this idea of, look, were six weeks into this. The average bear market throughout history is about 13 months you have some that are eight months which would be what shannon is talk about. I hope that is the case, but some that are two years. We dont know the depth and duration you can make the case that a lot of the stock decline you see in bear market, weve already had it we manage money strategically and tactically the big concern is duration. As excited as people were to buy the dip, will they have the same enthusiasm to do that, scott, if this is still going on in june or july . My take from 20 years of experience is they wont let me read you some of the i read you the head liec line of the Morgan Stanley note and now let me read you some of the text if you subscribe to this point of view, it changes the way youll think about the stock market we see a shallower rebound in q3 and we do not see activity returning to its previrus level until the end of 2021. Thats a long way off. Can i point out something that happened this week. I think what happened this week was really constructive for the bulls. Ill explain to you why. Last week we had an amazing rally. Historic rally took place. Thats great it gives people a chance to look at their allocation and catch their breath and make decisions without an explosion going on in front of the screen. I like that happened this week we really didnt give that much back thats constructive. Secondly, there is a differentiation in what got hit this week. This week the hardest hit area, retail take a look at the xrt and iyr anything to do with property, that makes sense to me of course, carnival down another 40 something percent this week theyre still paying for the airline, the cruise lines and now they are hitting the names that are most susceptible. Its rational. It makes sense that is happening. Amazon is up on the week microsoft is up on the week. These companies have almost become infrastructure plays. They are how were getting by right now. I like theres dispersion and that were making a judgment call before we just sell everything thats what has changed this week what about the notion, jim, that chanos told us yesterday, warning us against piling into these virus stocks whether its the zoom or the peleton, teledoc the ones that will thrive in this sort of environment where things are different and the work from home thing may g on longer being at home may go on for a little bit longer. Josh talked about a group of stocks that had been hit some of them are in the eye of the storm here then there are others that have done better. I wonder if you need to reassess where everything is at the current time were getting a lot of client inquiries on those stocks. When you look at the Balance Sheets and the cash flows of a zoom and a peleton, it tells you they are very healthy from a financial point of view. What it doesnt tell you is what sort of swralvaluation you shout on those stocks. Not with the market environment and the volatility youve got. What ive been saying to client who is talk about zoom, peleton or abbott labs, these companies are fine for the long run. You should expect the volatility in the market but you should expect volatility in these names. I think thats a way of saying that at the end of the day, a stock is a stock if we had a bear market rally last week, which is what it looks like and if it looks like well retest the lows, even the darlings will go along for the rides but those names are likely to be muted on the down side are we scott hold on a second. I want to ask you a question and you can answer it however you want it seems to me the conversation is around where we started it with the Morgan Stanley note as the narrative of youre either thinking this is a two quarter deal or youre thinking its a six quarter deal or somewhere in between. The somewhere in between and where ever you fall, in that spectrum tells a lot where the stock market may be by virtue of what the reality turns out to be i think thats absolutely right. People are going to be upside down 75 of the u. S. Population lives paycheck to paycheck once those full paychecks stop coming in then the bills start piling up. Were in an economy where 70 of gdp is driven by consumer spending, by Service Companies those Service Companies arent going to see their revenues hit the prior peak for a long time because people will be worried about paying rent, putting food on the table i doebnt see any way we come bk in two quarters. Not only that, once you have to deal with all thoseissues that you braupought up, its the apprehension to get back to prior level of normalcy. Its being in a hotel or airplane or any other number of things that we could mention after 9 11, it took three years for Airline Traffic to come back for passengers and you could see that security precautions were really strengthened and arguably it was much safer to fly at that point from a security standpoint but any point before, but three years it took to come back i dont know if its three years, but its not six months or a year to come back that leads me to the comments a that jim made. Peleton, hardly people are piling into it if you call the company its got a tremendous backlog being consistent with that theme, people are going to change their habits from going to a change, which is not cheap to buying peleton. When you look at zoom and teledoc, as irrational as it was to sell stocks without any aforethought, it was the same irrationality that caused people to buy zoom and teledoc. They are good models but zoom didnt deserve a mark cap of 34 billion now when theres so many competitors there. Let me bring in Mike Santolli you can take stock of the week and weigh in on this Morgan Stanley thing too and how you believer that shapes your own view on where you think we may be going it took the index to where it was three years early. Thats the other thing to keep in mind. Were talking about last years level of activity. Were at a stock market thats at 2017 levels i think we have to get away from this idea that the markets collectively are trying to sniff out some objective reality that sits out in time its going be impatient. Its going to price from a dire one, the next day. The reason it matters so much is thats when the clock is ticking on the solvency of large parts of the economy the erosion of the credit worthiness and the rise and default rates and things like that in large parts of the economy. Thats why i think the stock market has traded right along with credit this week. I dont want to get into who is leading, which is lagging, which market is smarter and which is not. That is relevant in the moment we dont have a Critical Mass of crisis relevant data right now i think this is how the markets are trading. The rally didnt prove all that much i agree its bullish to go sideways and kind of sag a little bit this week in terms of the s p. It doesnt necessarily tell you that it really gave anybody any impetus to say i see how the come back lacks. Sure. Did you think are you suggesting were going to be in range of some sort until we get more clarity that the violent moves up or down, or maybe in the near pass, for a while its going to be this up 500, down 400 i think a range makes sense now that everybody has adapted to the idea that things are bad. They will stay bad for a while we dont have criteria i dont think a range would be a bad thing. Is it going to happen. Is there urgency for it. Is there political will for it i think a lot of things that come in to disturb this idea the market is impatient. It will have these false starts. One thing to keep in mind is the stuff that has continued to lead and work, you really somewhere not gotten hurt. Its worth asking the question if that is persist can you have a place to hide in an environment like this that manages to work for a very long time its worth asking if that becomes a matter of fatigue and doesnt have the buying energy to keep these valuations in tact josh. To michaels point about where to hide, its very clear when you look at capsize small caps are down. The s p is down 1. 7 theres a clear preference for well funded, Large Enterprises over small caps. Which companies will have a tougher time i want to ask mike, how youre thinking about the timetable and how bad things will get might be a regional phenomenon. A lot of money is managed in new york, boston and chicago where the death rates are hire the infection counts are higher. Everything seems more severe on the west coast they seem to have done a much better job flattening the curve and you might have a disparity out there amongst even professional investors based on a bias concerning what the held situation feels like around where they live. Are you hearing anything like that out there it makes sense to me. I wonder exactly how to project the head of what that might mean it might mean protect stocks. The new york centriusm means when new york has peaked and rolled over as the rest of the country is still behind us and the global effects have not worked their way through it makes sense these companies that have held up better jim, we know the economic numbers will be dreadful and they will be dreadful for a while. The virus numbers are going to be have a greater tendency to move stocks to make us feel better and give us an idea of a date specific, if not hope of when we can get back to work you went to the root cause to have disaster here the short answer is yes, thats what matters we have two weeks before any sign of clarity comes. Every day feels like a week already. The problem is theres not going to be any information whether its economic or earnings that will give us any insight into what the other side of this looks like thats what the problem is im not negative in the long run. I do have an inclination that well retest the lows and it specifically because the stock market hates uncertainty and youve got two weeks of maximum uncertainty. Its not going to ebb. Thats simple. Is it that simple why bother thinking about what the other side will look like until we get the virus under control and the spread starts to slow down and the death rate in some of these hot spots slows, flattens, starts to go down, whatever i think thats why theres no point in trying to bottom fish here i think mike made a great point about the types that are performing well. Based on numbers we have looked at when the vix moves two standard deviations, whether youre working with individual investors or mor institutional investor, it doesnt make sense to bottom fish any buying, apart from what youre seeing in the Energy Market which is stabilization based on price changes, i dont see impetus to look outside the bode of stocks that held up pretty well over the course of the last couple of years talking about companies, quote, unquote, doing the right thing. I totally hear what youre saying and i think it totally matters and it will matter forever. The companies that stepped up will be viewed differently do you agree with this idea of its hard to think about the other side until you even from a stock market standpoint of dealing with the virus numbers i agree 1,000 percent thats the absolute delta. Its not two plus three equals five its two times three equals six. The more we get into the whole in terms of numbers, the more well get into the whole in the economy and the greater the fear factor is. Im not so sure we have to see the other side because the market is a discounting ne inin mechanism. We dont know why or when it will my suspicion before we peak, before the numbers are the absolute worse that we have seen so much carnage, so many terrible things on the news every single night throughout the day that the market will get past it. Then well revisit what it means economically to the economy. Neither is a good picture. To mikes point that were back to 2017 levels, lets not forget the market did nothing for 18 months until that last spurt in 2019 the market was already just wallowing in an area where it needed multiple expansion to move forward were going back to that and were going worse. Whats kind of interesting here is that whats interesting is i have a high beta portfolio thats generally a two edged sword. That is exacting like a champ because they are the Quality Growth Companies but youre losing the valuation umbrella of the entire market. I dont think they hold their levels where they are. Heres the problem, shannon, you guys, not we you guys who are managing money and giving people advice on money are doing it theoretically because you think you have some level of clarity on where things are going to be in a few months, six months or however months in the future, right . Youre predicting making a prognostication and a probability of where earnings will be. Here, the new normal, perhaps, for an investor which makes it difficult is you have no clarity on anything. You have no clarity on when the virus will level out and you have no clarity on what the other side will look like, so good luck. Its very challenging if you look at the three legged stool, we had fiscal stimulus an monetary stimulus. Theyre the backdrop for what is next accommodation on better data on the virus. Youve seen the story about different apps that will be use li utilized the way people can selfreport. These period where is its six weeks or eight weeks prior to. I think youre right its impossible the use the comparisons. I think we can use some Historical Context as it relates to significant decleaines and consumer spending. I agree with, i think it was josh who said, i dont think we get back to the level of Economic Activity from a cons e consumer side in the Third Quarter but how much of that have we priced in. If we get back to 60 or 70 of that activity by the Second Quarter of next year, are there firms, are there companies that you city think you can own where you can look at the sales and revenue they had over the last couple of years and extrapolate that with a discount you can make plausible case if youre an investor that i think stocks have come down enough if my time frame is three years, five years or longer than that, you can make a quality and credible case that stocks are attractive, right . If you are a long Term Investor and we had people who come on this show, who are, who arent buying for tomorrow or the day after who made credible cases for the longer term depending your age and time horizon might be thats the whole point im 43thinking about it because im not two years from retirement. If i were fully invested in equities i would be terrified because i lost years of working that i cant replace i cant do what i did in my 50s and 60s to reaccumulate those assets i would throw ou