Hour with our Investment Committee today. They are our committee let oos get a check lets get a check on the market. Stocks are marching higher we are right near session highs. Lets take a look at what exactly is driving things and for that, well start with josh brown because youre in the box right next to me right now what can you make of what this jobs report told us and why does the market continue to rally given the fact the economic prospects may be so dim . Im pretty comfortable saying this is the worst monthly jobs report any of you watching will ever see for as long as you live this is it this is the ugliest youll see we have lost 20 million jobs the all time record was two million jobs after world war ii and the worst we saw during the great financial recession a generation ago was 800,000 in a month. Youre not going to see this again. I think whats important to point out and i want to be delicate in the way i say this wall street is coming around to the fact that for the most part, the jobs that we have lost are at the lower end of the income scale which, from a societal perspective is absolutely daiserrous College Graduate right now whi is still terrible but looks nothing like what were seeing in segments like leisure and hospitality where its like 20 plus unfortunately, those are not the jobs that register the highest in terms of the real economy, in terms of how much those households spend thats something youre starting to hear economists talk about. Its a collapse for real peoples lives and very da dangerous. Im hoping not only is this the worst number we see but it gets rectified very quickly we cannot have a situation where people have to live under these conditions for much longer josh brings up a great point here oftentimes folks on wall street get made fun of for using the word hope when it comes to in s invemebeuse hope is not an Investment Strategy in situations like this, hope becomes important because it tells us things get better down the line its something people have to look forward to that times will get better and is this market right now saying that times will get better in a physical therapily quick fashion, steve i dont think its hope i think theres another h word and thats history no matter how bad the declines have been whether you go back to the depression from the late 20s, early 30s whether you go back to the war period and 08 history tells you that you always recover the recoveries over the last ten years have not taken years theyve taken months to start bouncing back. We have never seen anything like this this is truly disasterous. I agree with everything josh said i feel like how stupid am i. With all this bad news, what am i doing. Im not really paying attention to what the markets are doing. Im paying attention to the stocks that i own and how they have been performing in terms of an earnings in terms of what they are reporting in their guidance theres enough of companies that report Technology Companies that i own that beat current guidance and guided higher for the Second Quarter. We will go down at some point. The hope is that we get a vaccine and get a vaccine with next six months to a year. My hope is that everybody can get back to work and start making a living and arent depressed by conditions that theres some light at the end of the tunnel its critical to have that hope. The disconnect between reality and the market is the widest gap ive ever seen youve got to know what your tolerance is for volatility and have far youre looking at if you can look out far enough youll be okay and people will get back to work thats how things cycle. What were seeing right now is an inkrdsably quick abrooefruated cycle dismants ling of an economy when we come out of it with all this stimulus thats out there, its going to drive the economy better, faster, harder yes, while its unfortunately lowest income people that are disadvantaged now, they will come back to work. That brings up an interesting point with regard to how much is the optimism picture playing out there. Over the long term we know youre not a stock market investor unless you have some long term optimism ant the future of america and the markets and economy overall. Im looking at some of these stats on my screen were roughly, just around 30 off the closing lows that we saw back on march 23rd its the dow, the s p, the nasdaq even the russell 2000. You pick your poison its all up pretty big how much of a recovery is now factored in given the fact were only about 14 or 15 off record highs in the s p and we rallied some 30 plus off the closing lows i dont get it i think if we look at what has worked and the concentration in the market its those companies that have worked the most are the Companies Really benefitting from this environment. When the market does start working long before the data debts better but i think this time around its different there are two very different scenarios that could play out here we could, as steve said, have a vaccine that is announced or a tremendous amount of energy being put into finding something and there are now eight human trials going on. Its a high likelihood we do find something there that causes the market to appreciate further however, we also dont know exactly how this reopening process is going to play out we could have a scenario where overall illness begins to increase again and there is some maybe its a hybrid, not complete stay at home directive but some kind of hybrid that does prevent people from getting back to work i think staying disciplined and finding good values when they occur in the market have very important. That is being fairly well priced now to the up side. You look at the list and the top is energy. People have said that oil prices verify its a better proxy for whats happening with the Global Economy because of covid19. Consumer discretionary up around 33 . Those are all classic in terms of economically sensitive or cyclical sectors and they are far and away outpacing the market what does that tell you about whether or not this is one of those instances where we are free and clear of those lows we saw a month and a half ago were seeing rally from those even lower, i would argue lower quality and deep value type of companies and sectors. Were a little more cautious at the overall asset allocate level but were finding opportunities. If you think about within the equity market were looking for names that will do relatively well, not only in the current environment but beyond we see the move the cloud from companies as being accelerated in the current environment we would not be in those really cyclical areas of the industry complex or energy but Industrial Automation is something we think will continue for years as companies rethink their supply chains and maybe move them closer to home were finding opportunities in retails off price retail. Its not necessarily sitting on the fence some commentary out of wall street ill highlight two of them specifically this is jpmorgan, some of the highlights from his recent notes saying retaining a prorisk allocation given improving virus dynamic, extraordinary fiscal and Monetary Policy support arguing we would expect risky sates to continue to reopen. The dire economic reality will be felt beyond growth numbers. These are fairly smart and seasoned folk who is have seen a lot of cycles on wall street and they are arguing about it. Michael, where do you stand on this debate . Will things get going depending on how these economies reopen in the days and weeks right what has driven stock Prices Higher along with a bullish narrative that a lot have adopted to that says were going to be in this down trend for a time certain all the stuff that was doing well, you should stay with they will be tomorrows winners and its going to come back and thats where you want to be. When you see a clear bull and bear case, when you see Economic Data that diverges so much from whats happening in the market, one thing you know is broad disagreement, number one and number two, one of them ll be right. This bull case will be right or youre going to geta more prolonged difficult kind of se flair owe. Ken rogoff talking about a five year recovery was very dire. If you listen to some of the Investment Committee today, youve gotten some very good advice which is theres some good strong Core Companies to own. I think you have a safe portion to your portfolio. You do have that more opportunistic portion. One of them is going to be right. One will be wrong. Josh brown, lets get your thought on this really quick given what you have noticed about the jobs report and the Economic Data were expecting to see in the coming weeks and months here, what exactly then is your positioning . How are your clients looking at their portfolios and saying this is how i position myself for what could be the uncertainty coming in the next few weeks or so i think one of the key things and i talk about this is lot is we set expectations in advance so people understand were not playing against the nasdaq 100 with peoples like entire life savings. Its inappropriate its not what they need to retire the most important thing we can do for people is set the right expectations and then build portfolios that allow them to get through moments like these i dont know when they will come but i know there will be others. If you think about the way a diversified portfolio as done this year, u. S. Stocks not that bad. U. S. Growth stocks phenomenally well bonds held up their end occupy the bargain. If you had treasuries, you did really well there and mitigated a lot of the potential draw down you would have seen in the third week of march when we were at the low for stocks then, of course, depending on the investor theres a cash component sometimes theres a reit component. If you had a diversified portfolio going into this, the smartest thing you could have done and we did. Not at the perfect time but taking advantage of that volatility and done a rebalance. You dont have to get the low of the year in order for that to pay off. You do smart things like that. Then you take advantage of the fact a lot of your tax gains from 2019 went away nap was a big problem you had going into the year not a problem anymore. Now you can harvest some tax losses against those gains you try to do intel jents thing o intelligent things on a household by household basis i think if you stick to that philosophy, youre in better shape than the people who think theyre going to outsmart, what the whole world is about to do tomorrow or the next day thats what we do. It may not be sexy but we know it works just to tag on what josh was saying, we have recovered enormously if the rule is to sell low and buy high, as you look at that rebalancing that josh talks about thats so important, youre back at some pretty high levels here. Not a bad time if youre going to trim those positions again. Take advantage of future market weakness lets get another take on this right now our next guest says, welcome to the new bull market. Joining us now is bryan belski. They told me you were going to be on the phone but its good to see your face on the screen. Theres bit of caution and skepticism brewing right now at these levels given the sharp run we have seen higher. You think perhaps theres more room to run. We do thanks for having us we were on march 23rd and said the market would rally 40 to 50 from the lows and we were on the show the day after, they quoted me saying 324. I dont know a week later on 3 30, we were on your network, same show and said the market would not retest. We have received a lot of negative rhetoric from that. Why did we get to that conclusion if owe look at these bearish prognostications, these people looking for the Great Depression type of call, its like calling for the final score of the game and not allowing the players or the teams to even be picked or play they came up with that conclusion because they thought it was the most prudent and negative thing to do wall street has been negative for the better part of the last 20 years and we feed on this negativity we forgotten that coming out of these types of events which, by the way, to us its feeling more like a Natural Disaster than it is the Great Depression and as such, actually adds more fervor to the fundamental rally coming out of this. By in large we still believe that the u. S. Stock market is the best place to be in an increasingly bad neighborhood. We think canada is not too far behind the more bottoms up you can be, the better learn from it. As you move from dispair to hope and those leading will continue to lead. Remember, post the tech wreck. People said they would never buy another tech stock again in next 20 years, what came out . Google, a rebranded apple. Microsoft became a new Company Amazon became a power base netflix was the new company. Were going to have new leadership and that will continue to base and plod the bull market. We still think were in a 20year bull market. I want to push back a bit here this is no disrespect to you the names you just reeled off right now as being from emerging from the last bubble bursting have been leadership in this stock market for arguably years. There are those that say the narrow leadership in the s p because of those megacap tech and communication names does not bode well for the better long term trajectory of the better market because its 7 to 10 companies that are driving the vast majority of these gains how do you counter the argument that the leadership, meet the new boss is the same as the old boss is this going to be the ten stocks again for the next quarter, two, three or five years. Its a great question we published on this today because we have been getting so many questions people did the analysis, they would see that this is happened before in the market it happened in 1990. It happened in 1994, 97, 2000 when you look out 12 to 24 months out, you talked about being investor, i dont think anybody can maybe one quarter or two quarter calls. I also said too were going to see new leadership we are going to see new leadership its not just going to be amazon and apple leading for ever dont forget, major theme we think Going Forward will be on shoring and repatriation no one is talk about that. I think that will benefit small and mid cap stocks financials we think financials are the number one contrarian trade now. We think u. S. Financials, especially the big banks are a great place to be. Josh, i know you want to get in on this discussion as well. Yeah. First congratulations on your call i hope it continues to work out. Not just for you but for the benefit of every one living in america. I think the bearish side of every issue typically sounds more intellectual. Its much easier to sound market when youre detailing all the ways things can go wrong and how the fed made the worst move it ever made. Im not saying that case cant ever play out and we have seen instances where it has why is it so hard to be bullish and sound smart. Youre someone that does it well why does the bull case always sound so dopey and why is it so difficult for investors who just experienced a huge draw down to think the way you do youre doing this a long time. Id love your take i think its a great point. I learned the business 30 years ago from bill o neil. He told me just stick with stocks we have seen those factors the last two or three years massively underperform the reason we are focused so much on macro is were sew afraid of being wrong, we dont want to be right we want to prove everything that we buy thats not investing thats not life. You have to take a little risk every time you buy a stock or a bond or walk out of your apartment, youre taking risks thats correlated with whats happening in the world now we dont want to take a risk or live our live. We have to start living again. With that risk will come some reward theres some intangibles there but we have to live. The essence of investing is taking risk and living steve, i want to bring you in on this discussion as well we talked about a number of themes there are reasons that you are kind of looking towards what bryan is saying with interest, i guess. Yeah, heres what i say to bryans comments only kidding i appreciate the optimism and im there with you in terms of the premise of all this, that youve got such a narrow number of stocks and we know all the names that have led and going to lead the market thats where low performance has been thats false its a great headline to say i can give you name just this week, last week, over the last few years that performed pretty well those are the names if youre going to be a single stock investor and you cant do the bottoms up work, own them. I own just about every one up there. You look at some other stocks. They are in the right place. Fundamentally, they are moving quite well i dont recall anybody ever saying im never buying Technology Stocks after 2000 i recall them saying ill never buy a dot com again and that was right to do except for amazon. Everything said was great, it makes you think. Im talk about noise whats not noise is when you get under the hood of a company and you say i want to own this or i dont want to own it thats where the conversation should be. Those are some big thoughts out there as well. I also want to address a couple of things with regard to how we position with regard to sectors and stocks id like to know what you think is going to be that leadership which sectors should be the ones you should add money to with the s p up 30 in the last month and a half i think mr. Far said it best. The way we manage money and we have the Great Fortune of running five portfolios in can d canada and duoin the United States and we rebounced. I think thats what you want to do right now in terms of trying to be too cute i think from a leadership p perspective you have to stop and start with technology. Its got to spider web into things like energy and industrials and health care. It will benefit from those sectors. From a broader area you want to play themes. Themes is lifestyle. In Communication Services its the mobile society whether or not youre streaming or now work at home. We need increased broad band. These themes were in place well before covid and they accelerated during covid and they will become more important during and post covid. I think the last thing is theres a really interesting theme developing in reits with respect,000 they are transitioning so