An epic run up 400 this year. We will explain how the retail trader is driving the stock. Plus, big tech, big deals, toppagist tells us that companies amazon, facebook and alphabet should be buying up right now. Consolidation. Power lunch starts right now welcome to jim maybe well get to say hi later on its a record week on wall street which marks the end of the coronavirus bear market. Its coming to a close here. Bob is watching some key numbers for us bob. Its been a record week we had good numbers today. Our manufacturing and services is keeping us positive just want to show you some new highs. A lot of stuff involved in tech. Internet, anything having to do with the internet. Fdn is the new one the hold building, that itb had been on fire eight straight weeks of gains. U. S. Home sales hit a record pace today we saw home prices also move up as well. Look at some of these new high list is fairly thin but a lot is building related horton, pulte, lumber liquid daters these are all at or within a fraction of a percent of new highs. Anything building related decides tech, what moved this quarter, building related and Technology Look at some of these heating ventilation, airconditioning company. Lowes has been up strongly. All had great quarter. Its been great week overall a lot of milestones as kelly mentioned. The s p and nasdaq hit record highs this week. Apple crossed two trillion dollar mark. We had the shortest bear market in history, 33 days just from february to march 23rd close lagging sectors, energy, reits back to you. We have been talking a lot about the disconnect between wall streets gain and main stre streets pain. Are stocks soaring because of that pain . Are people buying items from amazon that they might have previously gotten at a local store. Government intervention playing role here. Stooefr Steve Liesman is looking at the economic fall out. Thanks. Many Big Companies have prospered in this pandemic because they have been able to Leverage Technology taking market share from some Small Businesses thomas lee says whats happening right now is quote, like throwing gasoline on the fire. Really accelerating whats happening. Here is some of those market gains. Apple up nearly a trillion dollars during the course of this pandemic. Amazon up by 704 this is market cap you can see microsoft, alphabet and fas book doing well. Revenues according to biz to credit down by 52 91,000 stores have closed permanently. 65 of store owners are concerned about closing. U. S. Chamber of commerce says. The feds Corporate Credit program has brought 12 billion in public corporate debt the effect is bigger it even helps stock. It helped spark massive new debt issuance the main Street Lending program aimed at medium size programs. Its booked 470 million in loans. Banks have to hold onto 5 that program could go up to 600 billion. They have a long way to go critics say its too expensive and banks dont want the risk. The Biggest Company they enjoy are broad and free fed backstop Medium Size Companies have to pay interest for the smallest companies, nothing is currently on the table. Nothing is. You look at the nail salon, the restaurant theyre not in the corporate net market they are running at a cash flow deficit and who knows whether they can survive, right . Right part of this is exactly what you say. We never had the means or the ability to help these Small Businesses problem though is we created an unfair Playing Field has tilted even more towards the Big Companies because one program, the program for Big Companies is working. Its driving down Interest Rates but no Similar Program for smaller companies. One idea thats been floated is for the u. S. Fed to follow european model which is to give a lot of money to banks to on land to other Small Businesses that idea has been floated by some former fed official i have spoken with. S steve, have great weekend much has been made much to your fatherinlaw. Regards to jim. Much has been made of the growing well meet jim later. I promise you. It will be too much to ask for him to stay quiet for fall hour. The growing divide between wall street and main street with markets hitting new highs while businesses around the country shut their doors for good. One of our next guests believe the gap between the two is much closer than we think joining us now is john lynch the cio at comerica assets, not the general manager of the San Francisco 49ers and ron. Gentlemen, welcome john, im going to start with you. Your concern is less, as i understand it, with the gap between main street and wall street and more youre worried about stock is what valuations are telling you. Talk me through that and why that is your point of concern. I think the market is pricing for perfection im not convinced, i think the main street data may factor into wall street data, if you will. When i look at profits for next year, wall street consensus p projecting profits that we achieved in 2019 i think it ha be very difficult to achieve if we have 10 or 15 or 20 million fewer workers next year that would require a surge in productivity like we never experienced previously i thinks the relative to profit forecast i think investors need to be prepared for that. The expectation for profits is pretty high with the valuations where they are now on current or trailing earnings and very high historically, ron, for future earnings. We really dont know yet, do we ron, the full effect of this Economic Situation on Small Businesses, medium size businesses, cities, towns across the country and what the employment picture is going to be we will talk about housing later. Those have bounced off lows but were not back where we were a year ago no. Some of it is the surge to the suburbs out of major cities. They happen to drive through manhattan the other night and i went up 6th avenue right now its summertime so restaurants can be open and seat people outside it really wasnt a bank, a super market, a corner store or a restaurant, saw a lot of boarded up and papered up facilities with for lease signs on them housing is benefitting from this surge to the suburbs and youre right. I dont think anyone has accurately tallied the damage to small and medium size businesses some estimates that may be as high as a million of about 30 million small and mid size businesses thats an enormous hit to the economy regionally, locally and nationally it will tally into the figures. Right now wall street is rewarding those companies that are gaining market share we have seen that in the great eight or whatever they are called without those eight stocks that dominate the major averages, its down about 14 . Its there you have to look undernooets the hood to find that dispersion that bob spoken about so many days in a row. You have a real narrow leadership in the market given what were just talking about, what is my best strategy for hedging the idea that the market seems to be moving up but it may be the possibility of some bumps along the way what should i do to both make a little more money, lever a little more and also protect what i may have made or made back were trying to project a barbell approach within our sector allocations within our portfolio. Were still taking advantage but we also want to be prepared for, were starting to see some move in cyclicality you seeing transports out perform and small caps as bob mentioned earlier starting to gain traction. I think it will been opportunity from the weaker dollar and the banks in particular. Ron, you have been candid in pointing out you have been cautious on the market and yes, you have missed the return from the march lows is it time to get in what are you doing what are you suggesting . Are you just Holding Tight it would be perfect it would be perfect right now if i said you have to pile back in because the momentum is too strong its not following the market higher the rotation has been to a certain extent halting at best it might make some sense to do that i still would use an opportunity, if youve been long on those big stocks to rebalance your portfolio, raise a little cash and maybe wait this out just a touch i know ive been wrong im generally in good company with respect to some of that i dont know this market, to me, looks like its extended. It looks like its over value and looks like by raising cash among some of your winners and redeploying that later in the year in to some of those areas that john was talking about rotating into would make more sense and even reallocating to some stronger overseas market where the growth differentials might favor developed overseas market versus the united states. John, ron, gone thanks, guys thank say hi to jim i will. Well go to the bond market now where rick is tracking all the action for us out in chicago. Rick yes, the prices are pretty much at the high offense the week on long dated treasuries which means the yields are on the lows of the week its 6337 were down two on the day. Down eight on the week down double digits, down ten basis points on the week we have just slowly deteriorated when it comes to the yield curve we know that two years notes, three year notes are not varealy moving very much we have dipped below 50 basis points which is very important finally, three day of the euro versus the dollar. Ultimately what were seeing is that the Euro Currency seems to have lost its mojo about midweek. The reason for that is maybe the covid scare. The data, some of the pmis were very weak unlike the u. S. That surprisingly had some of the best pmi numbers preliminary read since the beginning of 2019 tyler, back to you thank you very much, rick. Appreciate it. Coming up, a stock split surge both tesla and apple at record highs ahead of their stock splits well tell you why the moves could mean even bigger gains ahead. Plus, who would buy tiktok every one from microsoft to oracle is rumored to be in the running. Wall street thinks it could be amazon more power lunch, next introducing stocks by the slice from fidelity. Now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Welcome back its been a fresh week of milestones for tesla they are up another 25 this week the stock is already up nearly 400 this year it comes as the auto maker gears up for a five to one stock split. Our next guest says teslas cut like following is helping the fuel the gains tim, what tells you this the largely a momentum driven retail trading driven run up . Since the stock split was announced, you seen that giant increase there hasnt been any fundamental change to the business that would justify such a huge increase. Really, it underscores the idea theres a lot of Retail Investors excited to be in story. This is a story stock going to the beginning. Its a lot of ways elon musk sells his cars that may be the case. It kind of suggests if its all being driven by retail buying interest its the herd, more or less the herd is in this stock. The herd can leave the stock thats the challenge and the threat there not just for tesla but other Tech Companies right now that are seeing this huge run up as investors look for ways to put their money when theyre looking at other companies that arent doing so well. Theres another issue here for tesla as well. You have this anticipation that it will be in the s p 500. Having met its four quarters of profitability. Theres been increase in that way as well. Right now theres a huge interest in Retail Investors who are excited about the story that tesla is telling even if long time observers in the Auto Industry cant do the math on justifying that valuation. Remember, it was just may that elon musk was saying that the stock valuation of tesla was too high we should show this chart which is incredible. We were just showing on air, which compares the ordinary reason ownership of tesla to the stock price. They virtually overlap ownership has exploded from 100,000 to 550,000 accounts this year the number one held stock on robinhoods is ford its stock price chart seems to be inversely correlated. I dont know why they are all holding it the lower the stock price goes does that suggest that its not just the robinhood effect that is pushing up tesla share price . There is that but the excitement of the people who want to get into shares Going Forward. If you look at the companies out on in the investment world now who is seeing the increase i was talking to an investor the other night and saying the debate they have at night, where will you put your money in a bubble if you think this is a bubble the Interest Rates are so low. Not a lot of companies are performing you look at tesla every day and seems like its going up why not get a piece of that action it goes back to the original thesis of tesla which is its a big gamble the idea what elon musk was talking about is something he would say have very low chances of being successful. Though we have seen success in last year, thats build the momentum and expectations that success can go forward theres still a big risk here. Tim, i really much prefer to take a tour of your lovely home. It looks so nice back there. Im going to ask you about the e elon musk factor how much of this stock is directly attributable to the man elon musk in the same way, some years ago, that a big portion of the value of apple was attributable to steve jobs no doubt about it in a lot of peoples minds tesla and elon musk are the same at this point theres been efforts in the past to separate the two but that is what they are at this point. We saw the downside of that in 2018 when elon was struggling personally and struggling to get the company going. Some investors were very nervous about the companys future when it looked like perhaps he would be out as ceo concerns about that during the sec investigation, the stocks took a hit. The company and elon are one in many peoples mind theres good and bad for that. Right now elon is on top of the world. Almost trying to go to mars being comfortable with his other company for spacex they can get into tesla and his vision of transportation they can get into that vision of electric cars, solar cars. Thats what hes selling and something that daytoday people kind of understand the fundamentals are different those professional auto observers might be questioning some of this the retail, the little guy is buying into this vision. Im also taken with the home youre in. Its gorgeous. Anybody who is listening now, not watching this, you have to put a picture on twitter or something. Let me ask you before we let you go, tesla is about to split its stock. Apple is as well do you expect others to start doing the same thing this helps retailers get into it. Apple represents that. Being atraktsive to Retail Investors appreciate it. Thank you so much well explore that plus check out this mystery chart its a soaring Cyber Security stock that could get a boost as we head into the election. Well tell you the name when power lunch returns next in a highly capable lexus suv at the golden opportunity sales event. Lease the 2020 rx 350 for 419 a month for 36 months. Experience amazing. At your lexus dealer. Exits totally not the same without you. Were finally back and cant wait until you are too. Universal orlando resort. Buy now and get two days free at the parks. Restrictions apply. Welcome back to power lunch. One stand out sector within technology has been in the cloud. A new report suggests we could start to see a divergence in performance. Analysts there initiating a sell rating on workday and salesforce over fears of a slow down. Palo alto is getting a buy rating one of the several Cloud Companies reporting earnings next week. Lets bring in the trading nation team to discuss steve, ill start with you so Many Companies so far this earning season have said they cutting costs due to covid this report suggests companies will continue to invest in technology and the Cloud Services sector. Do you think that will be reflected in earnings next week . Yeah, i think it will the bureau of Economic Analysis shows that for the First Time Ever the percentage of business spending on Digital InvestmentLike Software and rnd have eclipsed physical investments. In a trend thats been taking place for the better part of five years but took hold in the First Quarter of this year with the pandemic you just get a will the of bang for your buck and in an environment where you have more remote work where your technology and Technological Solutions are key to your success. We think this will be a continued area of spend. We think companies that are focused on infrastructure software, remote work, security, digital commerce, productivity, these are all going to do particularly well and have strong top line growth i think the pricing model is a plus a lot of these Companies Offer subscription models. We think it makes lot of sense our report next week, you like palo alto network, you it looks strong tell us why. Definitely in the stock the stars and moon are aligned here. Id point out on the chart this looks like one of those inverted head and shoulder bottoms. You got a neckline at 250 to be broken out and started another leg higher from a fundamental perspective, like the upgrade from loop today. Got to give the hat tip to rob who upgraded the stock on march 22nd good looking stock breaking out.