Take some time for public to regain confidence and adapt to the new world and start traveling, taking vacation, going to restaurants and things like that. Im glad you brought that up. Thats one thing we havent talked about was this notion that when we looked to open our businesses and i think we all in a bipartisan way, thats what we want. We have to find this balance, opening our businesses in general. Theres only going to be as successful as the Customer Confidence that is there to patronize those businesses thats not just true for the Hospitality Industry thats true for all businesses i do know that the service and retail has been hardest hit business and my understanding that some of the data ive seen over 2 of those businesses have closed permanently already how are we to address this Consumer Confidence issue . I know thats something you thought about and talked about publicly what should we be doing . One thing ill say is it affects different sectors of the economy. The one we talked about is the one where its most important. Other sectors may be able to recover much more quickly and we hope so. The number one thing is people believing that its safe to go back to work and go out. Thats about having a sensible, thoughtful, reopening of the country. Something we all want. Something that were in the early stages of now. Thats what it will take for people to regain confidence and resume their activities. At a different pace depending on the nature of the business and the activity right and the health care piece of it. Theyll feel safe going back out and feel safe, they will be healthy and safe when they go into the establishments, isnt that true . It will be a combination of getting the virus under control, development of therapeutics, development of a vaccine also just, i think, seeing what your eyes are telling you. You can feel it already that people are doing things they wouldnt have done two thing months ago, a little bit at a time i think that process will take time until that happens, many people are relying on their local governments and State Governments as social safety net. Theyre telling them, looking to local government, State Government to tell them how they can stay safe and opening business, where the Health Care Facilities are and test and contact tracing. Isnt it true they rely on their local governments . Yes, i think thats where the decisions will be made state and local government and individual businesses, we talked to a lot of businesses and nonprofits and leaders in all those areas. What i feel is, certainly for the larger one, theres a thoughtful process going on about this ultima ultimately, people will make their own minds up you can change the formal social distancing measures but ultimately people will decide what they should and shouldnt do with themselves and with their families i think that will boil down to having pretty good confidence its safe to go out. I agree with you. I also know, at least in my state that many are waiting and relying on state and local governments to weigh in and help them make those determinations and set those guidelines and make sure they are safe. Thats why funding for our state and local governments is so important. I cannot stress that enough. In the only in the next fiscal package that needs to come to state and local governments but you also touched on it i would like to see more of that available to smaller populated states and local governments nevada has three million population there has to be way to also give them the opportunity to get the liquidity or funds that they need to ensure that theyre providing that safety, that social safety net to consumers in general i know my time is up secretary mnuchin i have questions for you as well. I will submit those for the record thank you both for joining us today. Thank you before i move to senator mcsally, ill announce to those remaining that we started about ten minutes ago and we still have a number left to go i ask you to please Pay Attention to the clock sorry it turns out this way at the end of these hearings. Thank you good to see you, virtually i want to talk about china we know they unleashed this virus on america and the world with their deception, continued Propaganda Campaign costing over 90,000 american lives, 30,000 americans losing jobs so far we dont know who patient zero is they kicked out doctors, journalists. Their reckless behavior continues to be the root of all this as you know this is why were here today were talk about the economy, which was very strong and now really struggling. People all over arizona are really struggling because of the calamity thats come from this virus. I want to i dont think anybody, let me ask. I dont think either of you think theres any reason we should be rewarding china or Chinese State owned enterprises for individuals or entities that want china to prosper as we implement these massive initiatives. Is it fair to say no one want thad to happen thats correct. Chairman powell thats really not a question for me were the economic response to this i know. None of us as americans want to see china or chinese owned enterprise prospering. I want to talk about a Company Called black rock. On march 24th, the Federal Reserve bank of new york retained black rock. As you know these facilities serve as markets for companies to sell bonds and obtain loans during these situations. Typically theres a competition, a Competitive Bidding process but black rock was selected for this one as you probably know blackrock is one of the leading Investment Banks in chinese funds including helping Chinese Companies list and go public on american stock exchanges. Chinese Companies Listed on american exchanges prohibit the Public Company accounting Oversight Board from reviewing their audit reports. Blackrocks website, they have page titled five myths and realities about investing in china. One of the biggest myth s Chinese State owned enterprises dont control their economy. Blackrock tries to back that up with data. I wont go into all of it but its ridiculous. Blackrock ode to china doesnt mention anything about human rights abuses, military abuses or the country is ruled by a communist party. They are one of the Worlds LargestInvestment Bank and a staple of free market. Neglects to mentions that communist run china while refusing to invest in legitimate issues here in america how did blackrock get selected how much money do they stand to make and what, if anything, will prevent blackrock from taking their profits they earn to invest in their interest in china and Chinese State owned enterprises . I guess ill take that. We hired blackrock for their expertise in these markets they are very large Asset Managers in the markets were concerned with it was done very quickly due to the urgency for their expertise. Well rebid the contract as we do Going Forward thats where that is the fees are a matter of Public Record and well be happy to supply those what, if anything, can we do to prevent any of their profits from this to benefitting china and Chinese State owned companies which they are severely invested in i would say this, all large Asset Managers buy chinese securities these are global Asset Managers. Im not here to defend or criticize them for that. Its not really relevant to the work we want them to do. What were trying to do is create conditions in which u. S. Workers can keep their jobs or return to them thats what our sole focus is. Were not trying to reach out for other Public Policy objectives or deviate from that. We have laser focus on that. We concluded this company was the right one to be our fiscal agent in this place. Their views on anything else are really not important whats important is that we do everything we can to support the united states. Let me say its important to all of us and thank you for your leadership on this, to support our economy, support jobs and get our economy on track its also important we wake up as americans and we hold china accountable and they dont theyre not allowed to profit because of these investments taxpayers are paid ill follow up with you on these issues i think blackrock and others need to wake up and do they patriotic duty km communist china should not profit off of unleashing this calamity on the world. That should unite all americans even if they work at blackrock senator jones thank you ill follow up i agree we need to hold all people accountable china, the w. H. O. , folks in this administration Everybody Needs to be held accountable if they had deficiencies in what was going on in this pandemic. Secretary mnuchin, let me say i saw recently that the treasury is going to begin issuing debit cards for americans for their direct payments. You will recall that senator cotton and i sent a letter shortly after the passage of the cares act encouraging that i appreciate your willingness to do that. I think it will quickly get money to millions of americans who havent received those direct payments yet. I wanted to ask you about Payroll Protection Program there were some problems with the banks and underserved communities that are not getting their funds. I think we tried to correct that and doing much better. The sba, Inspector General issued a report in the wake of that, at the recommended that the agency start collecting demographic information on who got thoese loans can you commit to work with the sba administrator to making demographic information mandatory for the ppp loans so there is that much needed transparency i can tell you in the forms that the lenders are required, there is demographic information. Weve been advised to make that optional and not mandatory we very much hope people provide that were committed to make sure we serve the underserved communities with the money we have left. Thank you chairman powell, i saw your speech and red your comments, saw the 60 minutes speech. It kind of reminds me that what judge taylor said in to kill a mockingbird in that people will see what they want to see and hear what they want to hear. I p sawsaw a call to action its affecting our minority communities. What being shown is the disparities on so many things. You mentioned how this pandemic can exacerbate the existing gap of wealth and assets and ownership between minorities and even poor people in general. We started with about 40 million poor people and it will get much bigger than that and it will be across racial lines. What can we do to try to narrow the gap to make sure the wealth gap does not get greater as we open back up this economy . Well, the job losses that have been happening have been happen in the Service Economy and in those parts where youre dealing with people. If you look at the Industries Hard hit its nose industri tho. Theres a lot in there its stunning how quickly households get into financial trouble. How little any lower income households have in terms of financial resources. These are longer term problems to deal with for now, it calls on us to do what we can to support the economy. We have 20 some Million People out of work. We want to do everything we can to create a world where they can go back to their jobs or find new jobs thats something all of us as policy makers should be strongly focused on well, thank you for that. It seems to be connected to your comments of also making sure that we keep people until their livelihoods. To keep the unploemployment nums down from our standpoint we have been focused on savori saving livingd saving livelihoods we dont want to give folks incentives to stay on unemployment, we want to give incentives to businesses who open carefully i would encourage you if you have to look at the Paycheck Security Program that senator warner and others will be filing this week so we can give these opportunities. Im assuming that the more opportunities we can give employers who keep people on their payroll with benefits, that would aid in opening up the economy safely and trying to keep us from getting into that long term recession. Would that be fair ill be happy to take a look at your legislation proposal great thank you. I appreciate the opportunity thank you for coming mr. Secretary. Senator moran thank you had i had more time, i would extol the virtues of the secretary and the chairman of their efforts, team and Public Service during this crisis in the absence of that time, i hope you understand the sentiments that sentence expresses. I want to focus, secretary mnuchin, we talked about ppp and seen the consequences, the positive consequences that have come from the program. There are large businesses, main street in which the facilities are being developed to assist but im worried about other businesses i would use an example, not that im lobbying for any company but an example that comes to my mind in kansas is yellow roadway, talking company. Employees almost 30,000 people, it is not Investment Grade it has leverage. It is a company that in the absence of assistance, the jeopardy of its employees are significant. I think theres a lot of companies out there like that. I think theres a number of other companies in kansas like that i want to make certain were doing the things that are necessary to prepare to be of assistance to them i think senator warner earlier indicated that very few of us expect treasury not to have to take losses. There needs to be some risk taking here and i want some kind of insurance that under the before program, before facilities that these kind of companies that are hugely important to the economy can receive some stance with the facilities, treasury and the fed. Secretary mnuchin is there some level of comfort i can have . You have my assurance we will go back and look at that specific company and see what we can do and get back to you i hope its more than that because its not just that company. This is hugely important just to be clear, Companies Like that. As i said before, we want to make sure there are facilities the companies dont fall through the cracks between all the different facility, were trying to do as much as we can within our powers let me suggest to you that timing is of the essence just as it was in ppp. The circumstances Companies Face today and layoff and furloughing employees are present and around the corner i encourage the precipitous but thoughtful action in addressing these circumstances. Let me see if i can get two other questions in one, do we have a time frame, mr. Secretary, for further guidance regarding ppp loan forgiveness . Theres some guidance that came out on loan forgiveness we believe deals with most of the major issues the second question does treasury and sba plan to issue guidance that would allow 5013c to use the size order for ppp eligible were reviewing that request is that something a decision is close to being imminent were going to decide one way or the other whether we can do that yes. Thank you very much thank you mr. Secretary, thank you, mr. Chairman . Thank you you get a gold star for yielding back a minute or so. Final senator is senator smith. Thank you for being here today. Chair powell, youve talked about how we wont be able to solve the economic crisis without solving the Public Health crisis, which i agree with secretary mnuchin, you said we need to reopen the economy in a thoughtful way, which i also agree with it. It seems an important part of being thoughtful is to make sure that americans have Accurate Information about whats going on i have no doubt youll be surprised to hear a lot of us were taken back when a couple of days or so ago we heard President Trump son eric trump acting as a surrogate for his father say this. He said they think, meaning they, the democrat, they are taking away Donald Trumps greatest tool, which is to be able to go into an arena filled with 50,000 people every single time, right. So they will and you watch they will milk it every single day between now and november 3rd and guess what, after november 3rd, coronavirus will magically all of a sudden go away and d disappear and everybody will be able to reopen this is the kind of misinformation that concerns me greatly. Secretary mnuchin, are you aware of any evidence of what eric trump said his assessment is accurate i didnt see erics comments nor do i think in this setting its appropriate for me to comment on it one way or another. I dont think its accurate and i think its exactly the kind of misinformation that is so damaging to our and undermining of our economic approaches and our policy approaches here. Let me ask you, secretary powell, even before the covid19 crisis, many minnesotans were struggling to find an affordable place to live. Last year i spoke with hundreds and hundreds of minnesotans about this challenge, Housing Developers as well they all told us at every part of the housing continuum from housing for Homeless People and support of housing all the way to Work Force Housing that this is a significant problem and a significant affordability challenge. Now we have this this coronavirus challenge i, along with my of my colleagues on this economy have been pushing for support for housing. 11. 5 billion for homeless assistance 100 billion for rental assistance and 75 billion to stabilize homeowners chair powell, could you talk a little bit about the importance of the housing sector in our economy right now and what challenges you see ahead for us as we are living through this crisis i appreciate what you said the most important policy objectives should be to keep people in their homes and keep them paying the bills. These are longer running problems which are under particular pressure right now but as an example, a lot of the jobs are in big urban areas. Thats where the job creation is the cost of living in those places is higher and higher, very high. Often, people who are in Service Industries providing their services have to commute very long times to be able to afford to live in place and so its an issue thats been with us for a while. They are important to our economy. I raelealize that you dont t to comment specifically on the policy issues we have confronting us here in congress. In general, do you see a risk to the Housing Market as the economy continues to take a downturn in the months ahead i think there are multiple risks. One is the extent that forbearance doesnt do the job you may have people losing their homes. Thats something would be great to avoid you also see the housing industry, i dont want to say coming to a halt but thats jobs right there. It comes down to sensibly, thoughtfully hoping up the economy in a way that builds confidence and keeps people safe its important that we do that well these other things will take care of themselves over time this is a issue i think we should continue to work on and talk about the challenges that people will have if they do lose their home the Ripple Effect of people not being able to pay their rent or mortgage and the impact through the housing continuum is great concern. If you dont have a great place to live then nothing else in your life works. I believe this is something important to address in the next package. Thank you very much. Thank you senator smith we have been joined by senator cinema she will be the last question. Shes on audio only. Thank you. If you finish in your five minutes, i may make it to the vote thank you every day arizonans are worried about their health and future. Thats why my office has doubled our state team to serve arizonans during this difficult time our goal is to offer top notch con stitch went services and going the extra mile to ensure they get the assistance they need im glad were having an oversight hearing because robust oversight is critical to ensuring we know where the cares act money is going and how its going to be spent. Its vital to ensuring that arizonans are not stuck in government bureaucracy my first question is for secretary mnuchin. Lets start with the Economic Injury disaster loans. I sent you a letter on april 17th outlining my concerns with how the administration has run this program i have not received a response the cares act promises Small Businesses 10,000 loan advance within three days of their application. I know arizonans who went through this process none of them got their loan advance within three days and no one received the full 10,000. Why arent they getting full amount and why arent they getting it on time first of all, let me apologize that you havent received a response. I will look into that after this and get back to you. As it relates to the program, thats within the sba but let me comment that the sba had significant systems issues getting the program up and running. I thought the grants were doing much better than the loans ill follow up and look at that. On the loans, the rebuilding the entire system because i think we have over five million loans to process. We will follow up with you you know the sba chainged to issue 1,000 per person and the original was 10,000 per company. Who authorized the change . I believe the sba administrator made the change. I believe her thought wads there was limited money and try to spread it out amongst as Many Companies as possibly. She did not think to go back to ask congress to authorize money to pay for that which they appropriated and call for in the legislation . There was additional money in the second phase we appreciate the congress reacted to that. Secretary, my question is, made this internal change without getting authorization from congress and if they are saying they did it because they didnt have enough money we gave more money and they still havent used it to give that money to people as promised as the 10,000 in the original legislation. Im more than happy to follow up with you. Im not involved in some of the direct specifics of that let me follow up with your office i appreciate that, secretary. The last thing ill say about the loan is my office is working on over 300 outstanding idle cases. Some are dating back to mid march. Can you tell me get these cases to move through quickly . We will work with the sba to follow up. Thats not acceptable. Well follow up with the sba with you i appreciate that i have some questions about the paycheck Protection Program as well Small Business owners in arizona are asking for guidance on how the loan forgiveness works and the lack of guidance has made it difficult for Small Businesses to plan. We received some guidance last friday and theres more to come. Could you tell me why its taking so long to get guidance on Small Business . We just commented, this was a very complicated program that we set up in a short period of time i thought that the guidance we put out dealt with all the issues if theres specific issues that youre hearing from, well follow up with you and provide that clarity i appreciate that we would like to follow up specifically as you know the application to get your ppp loan was only one page loan but the forgiveness application is 11 pages long according to my staff requires a minimum of three hours to complete this is a real problem for mom and pop shops in arizona what efforts can we offer to assist Small Businesses filling out the complex forms . I spent a lot of time on the complexity of that we tried to get it as short as we could under the requirements of the law i hope it doesnt take small hours for Small Business we tried to make it as short as possible i appreciate that mr. Chairman, i see that my time has expired. I would like you to make it to the vote i have many more questions ill submit some of them in writing. Thank you so much. Thank you i really appreciate that i understand senator brown wants to make a 60second statement. You can do so, please another successful hearing. Thank you, chair powell and secretary mnuchin. I wear on my lapels, a pin depicting a canary in the bird cage instead of the regular pin. You all know that story of the worker in the mine thats why we have the new deal with Worker Protections and Public Health. A century later its starting to feel like we are back in the mines. Many dont have a union to protect them it seems that once again, workers dont have a government that cares enough to protect them we look at how the administration treats essential workers especially africanamerican, latino workers putting their lives on the line. Look at who theyll willing to spend money on this administration tells us everything we need to know thats why Congress Needs to stand up for workers its why workers need unions so we can fight back for Economic Security and safety protections and a dignity they deserve and for american values. Mr. Chairman, thank you for allowing me the last minute or so thank you i also want to thank you, senator brown, for your cooperation in working with us and having this hearing and having it work out i appreciate the cooperative way in which we have been able to work on these hearings i do disagree with the notion that our secretary and our chairman here are not working very hard to make sure that their support we have voted on gets out to those very people, those who have these lower p paying jobs, those who are in the Service Industry the Small Businesses, the medium size businesses and those places that will be needed to stand unour economy as we have the opportunity to do so we may have a different point of view on that but i do appreciate your support in helping me get this hearing set up and working. To our witnesses, secretary mnuchin, chairman powell, i appreciate your cooperation and work with me as we put together this hearing we are plowing new ground here in the senate as is happening across this nation while we deal with covid19. Your cooperation and working to get us through this hearing and get your report to us is deeply appreciated. With that, i will say that for senators who wish to submit questions for the record, those questions are due on tuesday, may 26th i ask you, our witnesses to respond as quickly as possible thank you. Welcome our breaking News Coverage continues. This is the halftime report. We have been watching fedchair jay powell, Steve Mnuchin testifying the chair seeing the fed is committed to using its full range of tools to support the economy much like he told 60 minutes last weekend theres no limit to what fed can do theres so much to get to this hour i want to show you the major averages today as well big stories continues to be nasdaq lets begin with you you do return a growth portfolio. The perfect guest to have as we have been watching these stocks rise in the manner in which that he have. The nasdaq is only 5. 5 now from all time highs its up 7 in a month. You own many of these names, amazon, alphabet, facebook, apple. Can this continue . Yes, because growth is the new defense. I think now more than ever Stock Selection matters with the market down 8 an average stock is down over 16 . I think we lost her audio this is the center of debate as to whether this run in these stocks can continue to rise. Some people say there will be a reversal and money flowing into value. What do you think . Well, we had it yesterday this is one of the points we have been making they take a breek from buying the work from home economy and the cloud stocks and they plow into car rentals they dont last. You have to expect the next day they will make you look foolish. It happens over and over again thats been the story of the postrecovery economy since the last crisis. It makes sense to see that resume here. Ill make this point very quickly. 80 of s p 500 names are above their 50day but only 30 are above the 200 day. Were in this no mans land for the s p. The nasdaq totally different story. 505 of nasdaq stocks are in an up trend above a 200 day its more clear cut and investors, i think, will continue to fade those main reversion trades and stick with whats been working longer term. I believe we have you back. Ill let you continue with the question of whether these stocks are at the point of fully valued, over valued or still reason to buy them gross stocks by nature always look over valued which kind of makes you think about the earnings estimate story which perhaps were undervaluing the total Addressable Market and opportunity. What were talking about is secular growth stories that were winning before this pandemic started i think online in ecommerce is the perfect example. We had home depot and walmart report today walmart said its ecommerce sales were in over 70 the likes of stores of walmart and others are still in the early innings but it has a Ripple Effect to Digital PaymentServices Growth is no longer within tech alo alone. Its really touching most sectors of the economy like consumers and comm services. I would say you want to stick to growth stories that continue to shine. Does that sound right to you . Why take a flier on value stocks thinks theres about to be some kind of version, rotation, whatever you want to call it why would that happen now . I want to suggest i could see it when you a vaccine you could see these real economy stocks or older economy stocks whatever you want to characterize them as making a decent size come back. Up until then, the money will flow on the companies that people deem were built for this type of moment youre right. I think a lot of what yana is talking about and what josh is talk about makes a lot of sense. The cyclicals will not outperform look at what has led off the march lows it has been energy and industrials, materials its been also technology. I think there are points in time when you can find value in the cyclicals. I always talk about a barbell. I own a lot of these Growth Stocks they are huge waitings in my benchmark. I own them i believe in them but i think theres a lot of value in march and april. You step back a minute and you look about you talk about and we have talked about it. The massive monetary and fiscal stimul stimulus its 38 of gdp. Thats enormous. Thats a huge tail wind for risk assets, stocks and growth. You have to be opportunistic on the cyclicals. I wonder if that value is gone i can see your point those stocks have ripped back but now what why is there any belief they can continue to kind of rise that they had i get why theyre back now, but i dont get why they can continue to rise from here at the expense of some of these other names. I think if you have to believe that this economy is actually going to get better and its not just the liquidity story. Thats a big tail wind but as you reopen the economy, partial states, 95 of the states will be opening either partially or entirely by the end of may therefore, i think, as ive been saying for a while now, april may is the worth in terms of the Economic Data we saw today the nahb Home Building index up 7 points surprising to the upside its not great growth but its progress you make progress on the economy then you can build in. What that means for profitability and i would argue i feel better about the cyclicals today because of the fact that we are roping and that we will get the vaccines eventually youll build confidence. Those stocks still offer a lot of value what should people buy today . We dont have johns sound either well work on that our apologies there. Josh brown, we had a good opinion from steph and yana. You can settle the debate until we get johns audio back i think they can both be right. Im looking from a total return stand point. Im looking at a pretty decent yield. Its not a growth stock. Thats okay. I think im going to make money for it i agree with what stephanie is saying as we get closer to a full reopening, thats great here is the problem. Housing data is misleading the three hottest markets in the market flight, chicago, portland and seattle. What do they have in common. They have Technology Companies that are employing young people and raising wages they are in buoyant real estate markets. Look at applications applications are up huge from the lows of april but nowhere near where they were this time last year, of coursely youre going to get these rebound numbers that week over week look great. Its important not to extrapolate much beyond us going from apocalyptic to normal maybe not for the rest of this year im trying to balance my optimism with reopening, to s p stephanies point, we may reopen and gain back two third offense what we lost but were not going see a 2019 economy, for a really long time. Yeah. John, i think we have your audio back you with us . All right i am all right. What i was going to say to your question is im almost always that guy looking for growth. I dont agrdisagree with the ret of the panel about value in terms of some of the older sort of industrial names li stock made a dramatic 10 or 11 move in a day. E i think you can be selective but i dont think im going to change any time soon from a guy looking for growth to a guy looking for value stocks i mean, growth is really where the trading is and thats likely where im going to be for the rest of this year, scott lets talk about a couple of individual names and i want to bring in our guest for today walmart. What do you do with walmart off the earnings which we talked about . Were expected to be good for obvious reasons. You sold it and bought target a few weeks ago. Yeah, i made money. I was up about 25 in the position i owned it last year for the better part of the year. I kind of felt like its up 23 from its march low the expectations were really high i actually thought 10 comp, the whisper number was a bit higher than that. While it was an outstanding to line number, to me, i actually thought the two weeks ago when the ceo of target gave the update and said that Digital Sales were up 100 , comm, 7 , but number vs to come down because of investment, i was okay with that the stocks are 15 in two weeks so tomorrows number may not help the stock but i think longer term they are positioned well the c oh, will be on squawk box tomorrow morning youll want to catch that. Lets talk home depot. Steph, which you trimmed last week you own lowes instead of depot. Why . Were all nesting i know i am in my house. Its cheaper than home depot you have an opportunity for operating margin, spread to come in here. Home depot is much profitable and also the seasonality, the exposure of diy sector, to do yourself versus home depot plus home depot has done betterthan lowes home depot or lowes . They tend to when they go on those long streaks of working or not working they tend to be pretty correlated. If one of them figures out something thats working with consumers, the other copies it i think you can probably make money in both names. Very quickly on walmart, it illustrates everything im talking about. The problem with the reopening walmarts ecommerce sales were up 74 quarter over quarter. Home depot and lowes were up. Walmart managed to lose 2 billion on ecommerce which is double what analysts had been expecting in december. The cost of come plying with the new Health Challenge we face, a, its not going away and b, its better than you think. Its important to not get giddy. Its not that easy and simple. Lets bring in our guest for the day today. Mike, i hope youre well its nice to speak with you again. Thank you were just 50 s p points away from that. I think we have come away for the right reasons which is we have entered a recession we had this incredible policy response everybody can see for what it is and its growing almost every day. We have gotten more policy over the weekend from the house bill that was passed. Well see if it gets to the senate i think what was done in europe with this offering for Coronavirus Relief is kind of something we have been waiting for for the last decade. We may get coordinated policy fis sally out of europe. That was one of the big drivers yesterday. I think it will continue well have moments of doubt, uncertainty as we recover and reopen the economy i say were leaning toward our bull case which is 3250 for year end. Nasdaq has gotten us here were only 5. 5 from an all time high which is remarkable considering where we come from why do you think there will be a reversal and you say we need to watch the bond market and yields why make it more complicated i dont think its more complicated. I think its the evolution of a recovery one of the views weve had all along is that when a recession comes, it usually marks the end of the bear market as we have been saying for the last 18 months, most stocks have really not done that well. All the things we have been talking about, its been very narrow its been the Growth Stocks and thats what works well the end of the cycle like utilities and staples. Thats changing now. As we come out of a recession, rates do go up we do see the curves steepen that will lead to leadership change were employing our recession playback were not trying d ining to com it were trying to keep it simple you have to have a more balanced portfolio. You cant be defensively other yen orient and as youre coming out of a recession we want to have some of these cyclical stocks that have under performed forstocks. I wonder what makes you think were coming out of a recession so fick. The data is starting to bottom out whats the recovery looked like . We are more optimistic than most thinking its more steep one is policy related but our view right now is that we are seeing credit card data, some of the mobility data showing people are out and about as States Reopen we will have a recovery. Do we have a relapse next year but very little doubt that we will experience a recovery in the second half of this year. Are you in the camp of the i have a bank of america fund manager survey saying 10 only expected vshape recovery. 68 think what we have had is a bear market rally. Are you talking about a v or something close to it . We are in the v camp. We have written about it and talked about it and the Economics Team and yeah. We think that its going to be steep and sharp just like on the downside going into n and some is simple math with this devastation where you shut down the economy, you are going to have a recovery that locks like a v because the comparisons are that easy and simple. It takes a long time, suspect it, for consumers to get comfortable with the reopening we are worried about a number of Different Things you have moved into an outlier side now i harder hear anybody if anyone at all come on the network anymore talking v. Its hard to find an example in history where coming out of a recession it doesnt look like a v. That doesnt mean were back to where we were in the Fourth Quarter of 2019 any time soon. We think six quarters to get back to that type of output so yeah the consumers slow to participate but other parts of the economy that are taking share while the consumer spends money on goods opposed to travel and seeing that already. Thats why a lot of stocks that did as well as they have have done so well because theyre seeing the business p. K. Up aicd consumers spend money on different types of things. Josh brown . Hey, mike starting yields are an excellent predictor of total returns on fixed income, specifically in treasuries Going Forward what do you tell investors who are now sitting there with the 60 40 portfolio and the bonds did their job in the First Quarter of this year, they buffeted the risk but on a go forward basis probably not much to make, do you stick with bonds for the stability or do you look for other ways to get yield and maybe take more risk it is a really important question i think every asset allocator is struggling with the dilemma. I think as you know we were very overweight reits going into the year to expect to go to a recession. Never expected this type of recession and took that off so were basically underweight exposure and we like credit still because we think spreads can compress and like equities done mean you shouldnt own bonds. It is a buffer but not in the way that it has historically and you know that well, josh so its a different type of ben in it now. Its a safer asset but its not a total return of historically. Mike, it is steph, go ahead. Sorry. Im sorry i cant see you guys all at once when mike was talking so i apologize. No, no problems i understand your rate call and wondering when you worry about six, ten, 12 months from now seeing eninflation and when that becomes a threat. Yeah. It is a dilemma potentially down the road and we have written about this our Economics Team has i dont think inflation is a problem for at least 18 months and were in a deflationary shock. We are in a terrible recession and the risk of inflation a head wind for valuation or risk assets is a ways away and the chance of inflation is higher than in ten or 15 years because we are finally seeing fiscal policy being enacted with Monetary Policy in a way to be inflationary down the road 2022, i think thats when you might see inflation be a headwind and more important situation for investors is, as inflation goes from deflationary environment to normal can be very positive for stocks, particularly stocks levered to higher rates and rates higher. Mike, before you go, 3250 is where youre leaning you said. Yep. You think its a cyclicals to get us there no. I think a combination. We are recommending bar bell of high quality growth with some of the lower quality cyclical stocks the loser is more the pure defensive names that have benefited from rates going down and dont have the same Growth Prospects that perhaps health care and technology does. Understood. Be well. Talk to you soon i appreciate that, mike wilson doc, you have unusual activity you have ua . You bet, scott. Two right now. Both of them short term. Facebook take a look at fb, buying the end of this week, scott. The 22nd expiration 220 calls with roughly 215, 216. Take a look at hpq this is the end of may so in other words two weeks from now, scott. Buying the 18 calls with the stock roughly at 16. 40ish i like both of them. I was already long in facebook i added to it and i got hpq during the show. Good stuff. We have some time to answer questions. Stephanie link from christian in new york im a new investor purchased new holdings what do you think about those for the long term . I love the portfolio. Definitely diversified i own intel. It is a recent position post the earnings i think that the company is very well set up in the networking world, cloud they had a very good quarter in data center. The stock trading at tn times earnings and a good yield, as well. Josh brown, im a buy and hold investor with longterm horizon. Bought a small position in jpm, jpmorgan i realize banks face headwinds but should i add to the levels well, so, if Im Still Holding it then i guess its a defacto endorsement of you holding it or adding more. If its long time horizon, this is a better name to be in and theres a play of buyback, dividend and Capital Gains if we get curve steepening later this year. Jon najarian, with run in wayfair is it still a buy . Its still is but might not be for very much longer. It made a wonderful move i would hold it but aggressively writing calls if you own the shares here. From jim in pine hurst, north carolina, hope jims playing some golf. Are utilities a buy . I dont think so. They didnt protect you on the way down theyre down 11 and underperforming the market alternative might be health care at 20 discount to the market gives you dividend yield and has a hybrid defensive and pro growth exposures. All right josh brown, dylan in new jersey, is uber a smart longterm hold or would you rather hold lyft for the long term . Im not a fan of lyft i like ubers diversification. If they can make it through the political fights about classification of their employees long enough, autonomous driving will make it a moot argument and this will be a home run its a long time between now and then i dont have a huge position here. Have you sold anything of note that we should mention for our viewers . Not of note, nope. Okay. Appreciate having you here you have a final trade for us . Bsx, boston scientific, elective procedures for a recovery in the health care space. All right good stuff josh brown, final trade please. Staying with uber. Staying with uber okay jon najarian baba, scott i owned it bought more today. I think it blows through 220 to the upside here. I have interesting calls, today. Beyond meat. Downgraded on disney we have disney. It is less of an exposure than it used to be and prefer netflix here majority of the business disney that is is obviously exposed to social distancing headwinds and netflix is kind of getting stronger and bigger on both the revenue and earnings line and they have the scale and pricing power. All right good stuff thank you. That does it for us. Kelly picks it up now. Thank you, scott hi, everybody. Welcome to the exchange today. Look behind me the nasdaq is major average been in the green this morning but the s p just joined it just turned positive, fluctuating right now well call it for the s p 500 the nasdaq up 58 the dow down by a third. Heres the trend playing out underneath the surface to watch. The athome trade is back with zoom up big. Moderated to a 4 gain netflix up fractionally and alltime high today and retail is losing momentum walmart entirely given up the earlier gain