Underperformance of Large Cap Technology and outperformance of value. Guy, what did you make of the action today so i know you remember everything, so you may recall yesterdays show every once in a while something sticks with you, like an onion or Something Like that, yesterday there was something said on the show that resonated with me. We were talking about the vix. He correctly said just because you have an elevated vix, its not any deby definition a negate thing for the market today illustrated that exactly im shocked by todays performance. The reversals we saw yesterday should have followed through today. Maybe that happens tomorrow, i dont know what i make of it is the resilience of this market continues to be unprecedented, in my opinion. Still label me a skeptic lets pause this conversation we have some breaking news from moderna. The stock is up in the after hours session. Meg . This is the phase one study of modernas covid19 vaccine program. The full results being published in the new england journal of medicine this medicine. The study showed that the neutralizing antibodies the vaccine generated in all participants and the dose level at 100 micrograms, they found these neutralizing levels were about two to four times higher than what you see in people who have recovered from the disease. Neutral asizing antibodies block the virus from being able to infect cells pfizer saw about two to three times higher neutralizing antibody levels. We spoke with modernas chief medical officer. He said the results are similar between the two vaccines and he was encouraged by the pfizer data and the moderna data. Of course the question is going to become how long does this protection last. And we just dont know that. These results were as of day 57, so they are going to start a phase 3 trial on july 27th of 30,000 participants and that will give us the answer about how protective this looks to be now. Meg, these are the full results of a study that had been sort of i dont want to say alluded to but summarized, high level summary of the data and this is the full result . Yeah. Thats really good context on may 18th moderna stock went crazy up about 20 it basically put out the top line results we didnt have any of the details. Critics argued it was difficult to tell what we actually saw they only had data on eight of the 45 patients with neutralizing antibodies. This is the full 45 and it has fuller results on all of that and also on safety they did see some fever, some fatigue, some muscle pain in the trial, but nothing they said that would stop them from continuing and certainly nothing at that 100 microgram dose. The stock is popping in the after hours session on the back of these full phase 1 data up by 6 lets go straight to an analyst for some more context on this and what it means for moderna. Micha michael, great to have you with us how significant is this . Great to be here. Look, i think the real takeaway for investors is this should further increase confidence that we are getting a robust immune response and there should be great e. Er confidence this wille protective to a degree in transmission of covid. Ie that all of the individuals produced neutralizing antibodies at this level of two to four times those who actually recovered from the virus does this prove further that the same technology that pfizer and biointech are working on may be even more valid . Absolutely. You know, there was a lot of skepticism both on the platform when this data first came out from moderna a couple of months ago and of course didnt report the full results yet there was a lot of controversy, as you recall. Biointech and pfizer coming out with their data, which is very good biointech traded up a lot on that now were validating that with published data th we should feel good those two platforms are looking very good. Does it look like this mrnabased vaccine is going to cross the finish line, in your view i know thats early, but things are being expedited these days in terms of concurrent faphases being conducted. Our confidence remains high this data, of course is going to support a vaccine that is effective and meets the threshold for the dfda and if government to push this forward. It validates an mrna plat tomorrow so far. Its going to be thousands and thousands of patients. We should have a little more confidence after they do that. Is moderna a buy . Moderna is a buy. We have a buy on a price target of 90 we think its going to trade up with more data to come we are seeing moderna shares jump 10 dan nathan, there was a lot of criticism when they first offered these top line results, yet here they are, the full results and they are as good as people had hoped. Yeah. Here we are a couple months later from that time period the stock had been very volatile in that period until may and obviously had a huge spike prior to this data coming out, the Options Market was implying about a 28 move between now and about a month from now it was just showing you the level of anxiety that investors or traders had about this data i think thats probably dating back to may 18th its worth noting you kind of linked the data we saw with the pfizer drug. Listen, i think investors are getting a little bit more comfortable about the fact that we are going to have multiple Vaccines Available at some point in the future. Im just not certain if you want to extrapolate this to what this means. Did the market rally into the close today because this data was leaked or in anticipation of good data . I just dont see tens of millions of mercamericans takina fasttrack vaccine thats done within 6 months for something they dont know whats going to happen especially when we have tens of millions of americans who wont wear a mask to avoid the spread of the disease. I think its a little too soon to be extrapolating what this phase 1 data means right now. Guy talked about the vix. A borrowed analogy for him yesterday, you mentioned horse racing and not necessarily knowing which one is going to come out on front. I think its positive that we have a ton of players now pushing for a vaccine. Who is going to come out ahead, we dont know, but i think its overall a positive thing for the market, absolutely. Carter braxton worth . Talk about moderna had that spike with the previews may 18th here we have the official news or the validated news. Its not even as high as it was on may 18th. Two months later the data is in and yet traders right now are not even pushing it higher than what it was on the 18th of may when the first news broke. B biotech in general, this is a great area of the market when uptrends get too ahead of themselves, take a look at this chart. The ibb spent the past four years consolidating and is just now breaking up. Guy, your quick thoughts as we watch moderna up 11 . Yeah. First of all, its amazing you got that analyst on because he initiated yesterday i think to your point with a 90 price target thats a great call by him he should be proud of himself. Now at 84 it looks to be spot on i think 88 was the prior high if youve been low on this stock, you might be able to ride it up to 90 without question the way to play this entire space continues to be ibb. Were watching actually 10 was an understatement. Were edging up toward 15 now in the post market session. Shares of moderna up about 15 lets get back to the broader markets. Carter, what did you make of how the markets closed in a way i suppose the biggest news of the day is to have the banks come out with numbers and see no Real Movement goldman was up a decent amount independent of the overall market, the banks are so important. Theyre sort of the transmission mechanisms for the whole economy. Some not quite right if they cant follow through the whole notion of value growth, value is just going to perpetuate growth. I dont know what really changes that what about the energy space, what about big heavy financials, what about industrials what is likely to lead the market we saw signs of life in some of these value sectorinphese v s of these value sectorinectors, industrials, materials, energy, all outperformers. Though we had notable underperformance among beloved big cap tech stocks like microsoft, netflix today are we going to look back yesterday and say that was the start of either a consolidation period for big cap tech gains or the start of a rotation . Yeah. I think the answer is absolutely yes. Ill stand by that only because of the magnitude of the reversal and given the ridiculous move to the upside in so many of these stocks they were historically stretched. Thats not casting aspersion on any one of these companies but the magnitude of the moves has been unprecedented with the reversal you saw yesterday, again, its a historical reversal. I think its only happened once before for me to sit here and say its not a big deal is disingenuous i think well look back and say july 13th was a huge day i terms of the reversal and the flow of funds in this market. I think its a start of a possible trend ly weve seen volatility in the vix and seen sentiment swing from left to right so quickly on the drop of a dime of any news or developments. Yes, i can see it starting to be the beginning of a trend or part of a rotation, but im a little bit more cautious before saying this is the beginning here carter, i have to go to you chart master, was yesterday significant and was today followthrough sure. I think youre faced with two unwelcome choices. Youre volume invest in the worst sense, almost dumpster diving, going down and finding a Regional Bank or a beaten up retailer or Industrial Energy whose logbook is shrinking there has been a call for value outperforming. Its been going on since, let me tell you this and this is kind of fun if you think about the only period that value outperformed from the dotcom peak down over the ensuing three years, sort of 99 to 2000 to 2003. Value didnt do very well. Amazon lost 95 of its value its not so much value its that value can maybe hold up an arch period and steep one out of control. I thought yesterday was very obviously very important i thought the followthrough today or the lack thereof, amazon was down 4 , netflix was down 6 . These stocks were getting destroyed. Tesla was down 10 the fact they came back is extremely bullish. The fever hasnt totally broken just yet but that may be one step forward and two steps back for these names. And the point about what does the rotation look like, cyclical tech didnt get destroyed the came way that some of this highpriced software or internet names did. The move into some names like that might indicate some sort of rotation the last point i would say is if you look at the banks that were down today, they reported poorly if you look at citi and wells fargo. Jp morgan outperformed if you start to see that q2 is the worst of it, the worst sort of numbers, then you might see a rotation into cheaper banks. So the value trade might be a quarter or two. Despite the rally into the close, our next guest warns us summer correction is around underway mike wilson, great to have you with us. You think were about a month in for this correction youre calling for . Yeah. Its not that its a major correction it started on june 8th i think Everybody Knows the market peaked there, s p 500 we had a big pullback in june when the cyclical flash value stocks really underperformed and for good reason. Theres concerns about democratic sweep, other election concerns, all kinds of things that weighed on the beta trade and then we had this big rally back in the last couple weeks where we basically touched the old highs yesterday and got rejected i think were having a classic zig zag correction this summer i think its not done yet. I think all those concerns are still lingering in the background you know, covid cases are still rising we have an earnings season thats going to be somewhat messy. Today the banks put up good numbers generally speaking swept for wells. We have to consolidate some more the question you were asking a minute ago is the right one. Is there something more going on under the surface here i think its been going on the whole time Growth Stocks have done great. I agree with that. The other side of the barbell now is clearly cyclicals those stocks have done extraordinarily well since march 23rd when the market bottoms you cant look at this year to date because were in a recession and we have a new starting point the loser is defenses and really high quality stocks that were working last year because you were attend of the cycle i definitely think the cyclical is going to outperform growth even from here because they have more operating leverage and their expectations are still low. Were bullish on the recovery. We think this is a pause, not the end of the bull market, its the beginning of the bull market we got such a fast start we have to have a little bit of correction. California is reinstituting the lockdown measures they had in march. Is there a slowing of the reopening process . Yes, were seeing that generally speaking the reopening will continue. The new york area is doing well with the reopening, you know, slowly i think were learning as we go. My guess is were going to continue to make progress on that obviously vaccines are part of that discussion as well. I just think the Economic Impact of the virus itself is behind us the market is looking forward. Stocks are Long Duration assets. 2020 is a writeoff year. 2021 is going to have a much better year. It will be much better if we get a vaccine earlier than people expect you are expecting new highs after the election, so im wondering in that call what does the leadership of the market look like to get to those new highs . I think its what i was just talking about, which is its going to be a combination of some of the former leaders i would call that Growth Stocks at a reasonable price. Guy mentioned it earlier ridiculous performance some of the valuations are ridiculous on some of these stocks but there are some wonderful Growth Companies that have fine valuations they need to grow into those and they will. Then youre going to get this new cohort of the cyclical stocks that have been left behind for the better part of a decade whether that be banks, materials names, energy stocks, industrials. A lot of that could be driven by an election outcome where you get infrastructure spend mike, we got to go. Thanks so much for phoning in. Always good to hear from you mike wilson of morgan stanley. Bonawyn, you agree with this notion of a vshaped we kov edy im going to hold back on v more u or nike swoosh type of recovery the value play or values under performing has been a trend for a while. Theres been quite a bit of people pounding the table saying, listen, there needs to be this rotation out of megacap tech until theres a bit more clear cut answer to this covid crisis, until the volatility of the market calms down, people are going to continue to look for fortresslike Balance Sheets i stand by that. I think it will be a bit more i lo elongat elongated. President trump is expected to speak in the rose garden shortly. As soon as that somes comes up, go to it guy, back to the markets in the meantime, what do you make of what mike wilson said . Mike wilson does extraordinarily thoughtful work without question when he says things, i absolutely listen. I respect what hes saying i just dont necessarily agree with that bullish a thesis i do think the market is expansive and i think the reversals we saw yesterday technically did a lot of damage. Today sort of mitigates that, i understand, but there are a lot of things that happened yesterday that were going to be talking about in the days and weeks to come. Tconsumer confidence in the march and april period dropped 30 points. Its up 6 Points Industrial production dropped 16 or 17 to 1. 5 from the low we dont have that data yet. Certainly the move out of the banks in terms of almost record provisions, thats not the kind of thing that happens if youre all clear. Of course the big wildcard or one wildcard to factor into the markets is the tensions between the u. S. And china thats why we are awaiting President Trumps comments regarding china. Its not just trade. Its also mike pompeo yesterday saying that china did not have a right to claim resources in the south china sea, which of course china says it does have a right to do so so we have this ongoing back and forth rhetoric which all contributes to heightened tensions yeah. You guy verss have heard me says before i dont think the Trump Administrations policy toward china, while i think its bipartisan that we all agree we need to take them on, we are very much in a cold war with them on the tech front were in a bit of a hot war theres lots of examples i can point to increased tension with china just means headwinds to Global Growth we know were seeing deglobalization. If this sanctioned tit for tat results in a rollback of tariffs or put forward of more tariffs, when we know who pays for that u. S. Consumers pay for that, manufacturers pay for that, farmers pay for that i dont think it makes a heck of a lot of sense i think, again, looking at the state of the recovery through the lens of the stock market is a big mistake. If you look at what has happened in the economy just in the last four months, we had that march april period where it looked disastrous and that may june period where it looked less bad our economy is probably scarred for the next couple of years or so were going to have structural unemployment i think when we think about the back half of this year, its in the going to look like a v i think the u would be optimistic it looks maybe like a swoosh i suspect after the financial crisis, remember we heard about that double dip . We may get a double dip because weve front end loaded all of that stimulus. At some point, someone is going to say enough is enough, we cant continue to throw trillions at this without structural changes. As we await the president , lets check in with kayla tashi. Unclear if he will take questions from reporters the white house hasnt given a reason for this fairly lastminute press conference we know a couple of things about some deadlines that await the president. On july 2nd congress sent to the white house the hong kong autonomy act which was passed unanimously by both clahambers n would impose sanctions on beijing. Today is the last day of that deadline for the president to sign that law. If he chose not to sign it, he would face a veto override in members of congress because support for this legislation is so high. Peter navarro speaking with reporters on sunday said he expected the president to sign that bill into law this week and also to finish what he started in the rose garden in may. You may remember, melissa, in may the president had a similar event in the rose garden where he criticized china for the o opaci opacity. He asked financial regulators to look into it and he said he was going to be instructing agencies to revoke the special status of hong kong because of this National Security law. Peter navarro has said in recent days that the president is going to be moving forward with those policies and we know that the deadline for this legislation to be signed is today. That is what we expect the president to do at this event. What are you hearing from washington or china watchers as to what the retaliation could be on chinas part if the president does this . All of these actions have been well telegraphed and there are communications that are happening behind the scenes. The hard lines on both sides have been escalating in recent weeks. We have seen china threaten sanctions on certain u. S. Companies in china, defense contractors specifically in recent days. Thats what theyve been talking about. As far as specific actions well see what the president says. Sometimes the bark is bigger than the bite and china doesnt want to speak out of turn if that countries to be the case. Again, we are expecting President Trump to make comments from the rose garden on china. As soon as he gets to that podium, we will bring that delta reports its biggest loss ever. Well dive into these numbers. Stay tuned when we started carvana, they told us that selling cars 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. Lets go to the white house and listen to the president. But were going to go over quite a bit and maybe at the end well take some questions if we have time. Its not too hot today i signed legislation and an executive order to hold china accountable for its oppressive actions against the people of hong kong. The hong kong autonomy act which i signed this afternoon passed unanimously through congress this law gives my administration powerful new tools to hold responsible the individuals and the entities involved in extinguishing hong kongs freedom. Weve all watched what happened. Not a good situation their freedom has been taken away their rights have been taken away and with it goes hong kong in amy opinion because it will no longer be able to compete with free markets a lot of people have been leaving hong kong, i expect. We lost a serious competitor, competitive in that we incentivized to do a lot of business and do well we gave them things that nobody else had the right to do and that gave them a big edge over other markets. Because of that edge theyve done historic business, tremendous business, bigger than anybody would have thought years ago when we did this gift. It was really a gift to freedom. Today i also signed an executive order ending u. S. Preferential treatment for hong kong. Hong kong will now be treated the same as Mainland China, no special privileges, no special economic treatment and no export of sensitive technologies. In addition to that, as you know, were placing massive tariffs and have placed very large tariffs on china first time thats ever happened to china billions of dollars have been paid to the United States of which ive given quite a bit to the farmers and ranchers of our country because they were targeted thats been going on for three years. Its the first time anybodys ever done anything like that prior to the plague pouring in from china, they were having the worst year, as you know, in 67 years. I dont want them to have a bad year i want them to have a good year but they were taking advantage of the United States for many, many years thats stopping. But then virus came in and the world is a different place, but were now getting back and one of the reasons the markets is almost at the point that it was at prior to the plague, almost, were getting very close its a great thing, its an amazing thing what people have done and what theyve endured. No administration has been tougher on china than this administration we imposed historic tariffs, we stid stood up to chinas interallectl property theft we convinced many countries, many countries i did this myself for the most part, not to use huawei because we think its an unsafe Security Risk, its a big Security Risk i talked many countries out of using it they want to do business with us, they cant use it. Just today i believe that u. K. Announced that theyre not going to be using it that was up in the air for a long time but theyve decided. You look at italy, you look at many other countries we withdrew from the chinesedominated w. H. O. And we fully rebuilt the United States military the w. H. O. , world health organization, we were paying close to 500 million a year china was paying 39 million a year china had too much say they worked it very hard, which is a bad thing done by our past administrations, but we were tough. I was asking, why are we paying so much more than china . China has 1. 4 billion people we have 325, probably 325 million approximately. Nobody can give the exact couldnt were trying to get an exact count but we have over the years many illegals coming to the country. It depends on how you count it we have 325 Million People as opposed to 1. 4 billion people. The world trade is errible, that deal is terrible. The world health is a terrible deal weve been very touch gh on the World Trade Organization and as tough as you can get on world health we withdrew our money. We told them were getting out maybe well go back in when its correctly run, but they made a lot of bad predictions and said a lot of bad things about what to do and how to do it and they turned out to be wrong and they were really a puppet of china. We hold china fully responsible for concealing the virus and unleashing it upon the world they could have stopped it, they should have stopped it would have been very easy to do at the source when it happened in contrast, joe bidens entire career has been a gift to the Chinese Communist party and to the calamity of errors they made they made so many errors its been devastating for the american worker. China has taken out hundreds of billions of dollars a year from our country. We rebuilt china i give them all the credit in the world. I dont give the credit to the people who used to stand here because they allowed this to happen where hundreds of billions of dollars were taken out of the United States treasure in order to rebuild china. No country in the world has ever ripped off the United States like the incredible job that they did on this country and the people that ran it possibly its one of the reasons, certainly its one of the very big reasons trade and things related to trade, that i got elected in the first place ive been talking about it for a long time along with many other subjects frankly joe biden supported chinas entry into the World Trade Organization, one of the greatest geopolitical and economic disasters in world history. If you look at china, you look at the moment they joined the world trade. They were flatlining for years and years and years and decades and then all of a sudden they joined the World Trade Organization and they went like a rocket ship. They were given all sorts of advantages they were considered a developing country as a developing country, they got tremendous advantages over the United States and other countries. And they took advantage of those advantages and then some biden personally led the effort to give china permanent most favored nation status, which is a tremendous advantage for a country to have. Few countries have it. But the United States doesnt have it. Never did. Probably never even asked for it because they didnt know what they were doing. As Vice President biden was a leading advocate of the paris climate accord, which was unbelievably expensive to our country. It would have crushed american manufacturers while allowing china to pollute the atmosphere with impunity. Yet one more gift from biden to the Chinese Communist party. They took all of the advantage away from us they took everything away. Weave beve been listening t President Trump make comments from the rose garden on china. As expected, he signed the hong kong autonomy act. The president is doing exactly what we expected him to do he has announced he has signed the hong kong autonomy act which places sanctions on entities in beijing for cracking down on demonstrations in hong kong and hes also announced that hes putting out an executive order that would fully revoke this special status of hong kong and that for economic purposes hong kong would be treated the exact same as Mainland China this is something the administration telegraphed that it would do at the end of may. Since then, relations with china have further eroded with President Trump saying the phase one trade deal is intact but he has no interest in having phase 2 discussions because of what china did with the virus that it plagued the world with certainly the administration is cracking down on china, taking an even harder line than it did before until we see the exact text of this executive order, which i expect the white house to publish this evening, its unclear when this would take effect, what exactly it would do and which agencies would have jurisdiction here and then how china would respond to that. Kayla, thank you. Lets get some reaction to the latest developments. Lets bring in former Deputy Director of the National Economic counsel cleat williams. Given what has transpired this afternoon, can you give us a grade on how the u. S. china relationship is compared to, say, six months ago . Well, the u. S. china relationship has really been on a downward spiral for quite some time if you look back six months ago, we were in a position where we were signing the phase one deal. Even as that was happening, there were a lot of Different Things going on behind the scenes that were already starting, a technology decoupling we were already in some respects starting a financial decoupling. I dont think things are dramatically different but they have accelerated in a negative direction. There have been a number of measures taken that could impact publicly traded companies for instance the Trump Administration announcing it would scrap a 2013 agreement in which u. S. And chinese accounting officials would basically swap papers so each can Audit Companies listed in those countries. Im wondering from Financial Markets perspective, what is the most troubling in your view in terms of developments happening in the deterioration of this relationship. T mou honestly isnt all that significant because china hasnt been following it anyway they havent been letting our regulators audit the financial records and their companies. So just scrapping that i dont think is going to make a big difference i do think the administration is right to go after this issue of access to audits what is troubling to me is the next part of that issue and that thr fo there are folks in congress and the white house who are basically saying any investment flows into china are problematic because they contribute to chinas military civilian complex and any money going to a Chinese Company ultimately builds up the Chinese Military if that is your view, then no financial flows between our countries are really acceptable. That to me is much more troubling. Im not as worried about the audit stuff because its really about providing great e. Er disclosure to our investors. Thanks for your input guy, sounds like a wall is being built between china and the u. S. In terms of those financial flows . Without question. This is something weve said on the show for quite some time, that the rhetoric between the United States and the chinese is only going to get worse. I thought it would be extraordinarily negative for the market the market for whatever reason doesnt seem to care i think the market should take notice because this is going to get ramped up. Im hard pressed to believe youre not going to see some statement out of the chinese within the next 68 hours quite frankly because there will be some sort of, i would imagine, rhetoric retaliation its just going to continue. Again, President Trump is probably 100 correct to go after the chinese and to draw a line in the sand with that said, it has severe ramifications for the market i think he looks at our stock market and says, and he mentioned it earlier, with a whisper of an alltime high, i think in his mind he has some chips he can play with in terms of the rhetoric. I think that is why the vix is going to stay around the 30 level. In the past six months the relationship has been on a downward spiral, but in the past six months the markets have recovered big time from the march 23rd lows, carter. You know, it almost is like the market is completely enured to all of this. Right its all about the fed, right . You throw this kind of money, its almost a record spike in a short time frame theres an expression. The fix is in. I mean, if you helicopter money literally, that creates the kind of moves youre seeing in some of these stocks. More beaten down names bouncing as well as uncorrected names surging. No tricks last forever. Coming up, its been a blood bath in the big banks today as earnings season kicks off. Well break down whaist ahead for these names,next re turning you may be learning about medicare and supplemental insurance. Medicare is great, but it doesnt cover everything. Only about 80 of your part b medicare costs. A Medicare SupplementInsurance Plan may help cover some of the rest. Learn how an aarp Medicare SupplementInsurance Plan, insured by Unitedhealthcare Insurance Company might be the right choice for you. A free decision guide is a great place to start. Call today to request yours. So what makes an aarp Medicare Supplement plan unique . These are the only Medicare Supplement plans endorsed by aarp because they meet aarps high standards of quality and service. Youre also getting the great features that any Medicare Supplement plan provides. You may choose any doctor that accepts medicare patients. You can even visit a specialist. With this type of plan there are no networks or referrals needed. Also, a Medicare Supplement plan. Goes with you when you travel anywhere in the u. S. Call today for a free guide. Balance sheets and loan quality is frankly as good as its ever been not just for us but across the board versus larger banks versus the prior crisis for each of us its a little bit different. Thats wells fargos john shre shrewsbu shrewsbury lets bring in gerard cassidy. Great to have you back thank you. The stocks didnt do so well. Citis and jp morgans results looked fine on the surface im wondering what you think was behind the underperformance. I think one of the Drivers Behind todays numbers was the fantastic Capital Markets numbers that jp put up and many citi groups did as well. As we all know, the Capital Market numbers can be volatile so we cannot forecast out an elevated level of Capital Markets in fourth quarters compared to the second quarters. When investors look a look at the Core Commercial banking numbers, which were mediocre to okay, they realized that the Capital Markets were generally softer in the summer time and in the Holiday Season its closer to the fourth quarter. That was maybe weighing on investors minds Capital Markets have nonsustainable at these levels. In terms of what else you th will be an issue, especially as the banks put aside more money for potentially bad loans than have been expected on the street. Youre absolutely right credit provisions were very, very high. Citi groups was the bottom line wells fargo was much greater than expected. The dilemma for the banks is under the new accounting rules, theyre all setting aside money for future losses. The future losses are highly dependent upon the view of the economy. Because of the uncertain situation were in, investors dont have a good grasp on whether the recovery is going to be more vshaped or like a nike swoosh or do we go into a w where its an actual recession . Its going to weigh on the bank stocks because of the credit situation. I looked at wells fargo tangible book was 31. 48 here we are trading for the 24 handle these are discounted tangible books like we havent seen probably in the last 12 years. What is that telling you youre bringing up a really good point with the discounted tangible value per share its telling you there are still challenges ahead for wells fargo. Theyre unfortunately uniquely positioned to feel the most pain on a Going Forward basis because of the asset cap we know because of the cease and desist order issued back in 2017, they have had their Balance Sheet frozen heres the challenge the low Interest Rate environment is putting pressure on spreads and margins so the compression is like a vice youre seeing the revenues fall at the same time credit costs are rising and operating expenses they are in the worst position of the big banks at the present time gerard, thank you always good to speak with you. Thank you same here. Bonawyn, your take on the banks . I mentioned it yesterday. I really think what youre seeing is a differentiation between those that have robust trading and fee generating assets under their umbrella, vertically integrated, diversified banks veisavis those that have a commercial Retail Banking arm jp morgan set themselves apart i would assume citi had to an extent i wou there was a lot of risk already with wells fargo i think youre going to continue to see that trend. Dan, quick on banks yeah. I think that guys point about valuation discounted book, youre seeing it in the money ci centers. You have a shot to buy them later. Maybe late q3 they look like that great opportunity to buy them for a massive run as we go into 2021 and the economy is better. Lets get to options action now. Bonawyn, youre watching United Health im taking a look at the options. Calls outweigh puts about 21. Weve seen that open interest is about inline i want to make that point. If you take a look out to the weekly expiration at the money straddle, straddles are implying about a 4 move in either direction between now and then thats inline with what weve seen over the last four quarters what i really want to point out to you is what i saw was a seller of about 14 or 1500 of the august 28th expiry 270 puts. Those traded around 5 5. 36. Thats about 13 Downside Protection in there for you. I will add that we also say a bit of shortterm call buying as well and the stock has been up 3 over the last few days. Definitely bullish trend Going Forward. Tonig apps except work. Rywhere. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com. Welcome back to fast money. Take a look at shares of Moderna Holding onto the big gains in the after hours session of 15. 3 after releasing full results for its phase one Coronavirus Vaccine trial in humans. Those positive results putting the bid on the reopening trade in fact, take a look in the after hours session at the moves were seeing in airlines and cruise lines, travel stocks. Theyre all jumping on positive news of this Coronavirus Vaccine. Guy, looks like has reignited this trade reignited thats a great word. Thats opposed to reunited by that peaches and herb. I digress. I go back to something jeff said last night in terms of chasing pfizer this is Proof Positive as to why you dont want to chase. Im more inclined to buy the weakness in gilead than to try to chase moderna here. There are many, many chapters left in this book and i think youre going to have an opportunity to probably buy moderna cheaper and sell gilead higher if that makes sense to the people at home. This is all good news for the industries that need the vaccine so desperately in order to get people back. Were talking about disney, which is up about 2 in the after hours session. You know, it is, but this is somewhat of a rerun. Weve seen this show before. Weve seen the airlines all have pops weve even seen pops in names like hertz sentiment seems to swing on the drop of a dime buy the rumor, sell the news. Well see how this all opens tomorrow time for the final trade now dan nathan guy has been all over this short dollar trade i think you play it via uup. Bonawyn cast a wide net tornado the biotech, ibb, proceed with caution. Slb guy, you like that one. You know i dig Carter Braxton worth. He could read the phone book and i would be a buyer of that he is that smooth. You know what im saying pantheon, parthenon right to carters point fcx looks like it wants to continue to move higher. Thank you so much for watching fast money. Mad money with my mission is simple, to make you money im here to level the Playing Field for all investors. Theres always a bull market somewhere and i promise to help you find it. Mad money starts now hey, im cramer. Welcome to mad money. Welcome to cramerica other people want to make friends. Im just trying to make you some money. My job is not just to entertain, but to educate, teach you and put this in context socall me 1800743cnbc or tweet me