Information is incorporated there. Im keeping an eye on relationships between stocks and bonds. Bonds have vastly outperformed you can see the chart in the bond mark ket index. A lot of chatter about how Pension Funds will have to rebalance out of bonds into stocks to keep ratings consistent whether yesterday was a front running of that activity or whether by the way individuals may now use it as an occasion to say my allocation is out of whack because stocks are smaller, that is something we can watch perhaps play out on over the next few days mike santoly, thank you that sets us up well for our first discussion, market panel of the day well start with market action, another volatile trading session so far good morning andrew, ill start with you, how are you advising clients right now . Especially given the fact we are coming off the dow having the best day in 80 years, but historically weve seen these moves on a singlef day basis in the midst of recessions or bear markets. Great question. Good morning i think what you need to see, you need to see multiple good days of performance. Weve had, in the last couple weeks weve had days of very good bounces but then theres been no follow through so what we wanted to see is a follow through day like today coming on the heels. Thats a good sign theres one thing that i would point out that is occurring, which is there is a leadership rotation occurring over the last five years just buying low ball stocks has worked really well since early march, as the market has dropped, that hasnt outperformed what is starting to outperform is more the cyclical stocks. That is a good sign of a bottom when you get a leadership rotation but i really think you need to see a couple good days to think we put in a bottom here in the market on monday thats an interesting point you make, especially given, i think, the fact that it probably feels counter intuitive to some investors to be focussing in on cyclicals right now seeing everything playing out, where manufacturing is concerned, supply chains, et cetera ally, how should investors be positioning themselves for not just now but also the long term. Is it too late to sell or building cash right now . Not at all. Look, we came from a rip roaring economy, lowest unemployment weve seen strong consumers, strong consumer balance sheets. Were going to get there again whether its a v shape, w shape, u shape, when youre investing for longterm investors, thats not the point. We have the structure coming down, which is something that we like to see. We just cannot sustain these leaves, just like we cannot sustain the panic of going to the food store and hijacking toilet paper but we still have a realized over the last ten days of north of 120 thats not an environment we want longterm trading in. We are still, when we get rallies, taking a little risk off the table for those clients who either need additional lick y liquidity or would like to buy time whether we do it through the options market, etf or active management which i think is going to be a new trend you will see coming forward, the ability to produce over benchmark. For now i would say we have two pillars of the three legged stool that feel great, Federal Reserve and hopefully fiscal but we have the dampening of that curve and what the virus looks like out there to deal with and thats going to be very sensational for investors. Andrew, you say this should be a two quarter downturn based on where the market is now but heres what im puzzling over a lot of that seems to be based on the patterns we see out of china and south korea, which shutdown their economies for a pretty extended period of time its not clear at this point that the u. S. Is willing to do that, based on what the president has said over the past couple of days if the president does try to encourage various businesses to open back up within three weeks, say, how does that affect, in your estimation, the importance of flat itening the curve, the economy and therefore the market well, if, in fact, we could reopen the economy, then i think, you know, as it pertains to the market, the low is in i always remind people that the worst time to invest is when things are great and they go to less great and the best time to invest is when things go from horrible to less horrible if, in fact, the low of unemployment is in the next month, then thats a very good sign. I agree with you, its a great point, china is a different situation. But look at japan. The market peaked a couple weeks before we did, the market bottomed a couple days before, and the market is up 18 if you look at the state of washington, their numbers are not they were the first in. Their numbers are not growing quite as rapidly so i think its beyond just whats happening in china that leads me to believe. It italy, the rate of acceleration is slowing down. So i think there is a chance that this, in the next month, the numbers will you know, the horrible numbers will be in the next month or so, and the market is a forward predictor and it will start to look through that ali, you mentioned watched for volatility to come down. I dont want to say when would you expect that to happen, but how would you expect that to play out what would the levels be that you would be watching for . Look, i mean, the difference between where you know, the peak here was in the 80s, were talking about a realized of 120. You know, we just want to get down to a level that is sustainable and that illustrates fundamental positioning. A lot of the market volatility that we saw over the last couple weeks was really massive institutional players just sort of puking out leverage, as opposed to what were seeing now. You mentioned Pension Funds, that repositioning, individuals are part of this we need to see something sustainable to get into. Yesterday having the biggest day since 1933 only complicates that picture. I think what your former guest said is the case markets are going to recover before the economy recovers. We are starting to have scenarios between china and italy that demonstrate that you can start to quantify, you know, companies, the banks have come out with anywhere between 10 and 24 down in earnings for the Second Quarter theres a consensus this is probably an economic recovery thats in the Fourth Quarter of this year or 2021 event. But i still think there is a ton of volatility out there. And by the way, the thing that we havent talked about yet this morning is the plumbing in the fixed income markets is Getting Better yesterday was the first time we saw some issue in europe we have a long way to go where that is. And im not comfortable getting clients really back into markets in a direct funded way until the plumbing with the fixed income and credit markets feels like it is on a real path to recovery. Andrew, i just want to revisit what you said to make sure im clear do you think the market right here, particularly, you know, u. S. Markets, are priced assuming that we do have an extended shutdown and manage to flatten the curve, or are you saying whether we do that or not, the expectation is that this is a two quarter phenomenon, even if the government and other authorities suggest a shift in strategy there that results in perhaps greater loss of life, we would hate to see that but that one or both of those eventualities is priced into the market the market peak was down 34 . That is not a normal recession markets drop more in the 40, 45 range. A normal recession is four quarters plus. I think down 34 is pricing in a short recession. And i think there is a good chance of that, but if it morphs further to longer, then the low of monday will not be the low. I think its a good chance it will be a short recession. I would stress, though, as your other guest is pointing out, this is a good point you dont get a bottom and then an instant recovery. Theres going to be retest along the way. But i think theres a good chance that that was the initial low. Well get a relief rally you know, im watching today, you need to see back to back and then you will get some further drippage down because these Companies Still need to preannounce and bring down numbers. But my belief is that this is a health scare and, therefore, thats why we had such a rapid decline from good to bad and likewise we will start to come out of this sooner than people think. And, therefore, it is a short recession. Deep, very deep, but a short recession will lead to a a shallow not the depths of a normal recession like we saw in 2000 or 2008 i hope youre right i think if theres one key take away you both put out there this morning its that we could have a recovery in the market before an actual recovery in the economy. Today, at least right now, certainly the s p and the dow industrials are higher in the session for the second day in a row. Alli and andrew, thank you were going to take a quick commercial break check on the markets before we go we have the s p 500 still up about. 8 . The dow, 2. 5 gain with boeing leading the way. And the nasdaq is trying to turn positive reports out of italy, maybe the l lombardy death curve starting to flatten out. The ten year is stju under. 8 much more on the markets right after this we see harnessing natural gas unleashing the promise of clean energy. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. Welcome back our next guest runs a Pharmacy Company that delivers prescriptions straight to your door in several major cities, eric is the founder of capsule and joins us now eric, good morning good morning. Great to be on its great to have you. Youre operating free delivery in select areas of new york city, san francisco, d. C. , chicago, lets talk specifically about new york, because it is certainly being hit the hardest in this country by covid 19. What have you seen as far as volume of new sign ups, stress on your Delivery Network how are you handling it . Absolutely. New york is, as we all know, the epicenter of the crisis right now. We have cases doubling every three days and we think its super important that people are able to stay home to keep the Community Safe weve seen tremendous inbound and demand not only from consumers but from doctors, hospitals, and from local government officials because were the only pharmacy that delivers for free the same day, seven days a week, in three easy clicks and we have the operational and Technology Infrastructure to continue supporting the community at this time some of the data weve seen is, weve seen a 5x increase in the number of new people bringing prescriptions over to capsule. And there are days that our business is seeing 30 to 50 weekonweek increases in the entire business. Our entire team is on the front lines right now of this crisis and helping the Community Get through it and theyre real heroes being able to support the community to do this weve been partnering with, you know, local businesses in new york that had to either layoff or furlough workers to be able to continue to aggressively build our capacity so were able to continue serving the community. We think right now that medication delivery is an absolutely essential tool in containing the virus and thats one of the things that the government in wuhan wa very aggressive in moving care online, particularly in really moving people out of physical pharmacies and using medication delivery as a tool to contain the spread and enable people to stay at home and isolate so were able to overcome what is obviously a Massive PublicHealth Crisis right now. Absolutely. Because i imagine pharmacies are a location where either people who are already sick with the virus or people who are at high risk from getting hit hard by it would con agree gait if they were forced to come out. How are you able to keep up with demand what additional safety precautions, if any, are your delivery workers taking . How long does it take you to train someone who might be used to delivering food to deliver this eric . I believe we lost the audio on eric we are going to try to get that back, guys but kelly, i tell you, as we hear more and more of these stories and there was just one in the New York Times over the past day about people who are dealing with the impact of the coronavirus right now, caring for loved ones, its so key to be able to get resources into the home and do it in a way that doesnt put the public at risk 1000 on that note andrew cuomo is giving his update in new york city. Lets listen in to the governor. Hospitalization and then there are degrees of hospitalization, right but the total universe that requires hospitalization is 15 . The we use projection models. We have cornell while, this is a great medical institution that does projection models, the department of health does projection models. The projection models are important because they are projecting the possible trajectory and protecting the possible need, right so were planning for a need the projection models do that. The projection models are just that, they are models of projections. Theyre not necessarily definitive, but its the only device that we have to plan, right. Follow the data, follow the data, follow the data. The actual hospitalizations have moved at a higher rate than the projected models than all the projected models so that was obviously concerning, because at higher infection rate, means faster, higher capacity on the hospitals and thats the critical point for us is the number of people going to hospitals right now, what were looking at is about 140,000 cases coming into the hospitals the Hospital Capacity is 53,000 beds thats a problem were looking at about 40,000 icu cases coming into the hospitals. We have about 3,000 icu beds, thats a challenge what is an icu bed for these purposes basically a bed with a ventilator the ventilator is the most important piece of care for this illness because this is a respiratory illness and people need more ventilation than usual. We want to reduce the number of cases coming into the hospitals, slow the number of cases coming into the hospitals thats what dr. Fauci is talking about on tv every day, flatten the curve, flatten the curve slow the number of people coming into hospitals so we can deal with them in the hospitals and we are working on that at the same time, increase your Hospital Capacity. Right. So try to slow the number of cases coming into the hospital, meanwhile, raise your Hospital Capacity we are working on both simultaneously we have been from day one. Reduce the number of cases coming in, flatten the curve so the spread of the infection we are doing everything we can on that. Thats banning nonessential workers, thats social distancing, thats closing restaurants, closing gyms. Just flatten the curve, slow the infection rate one issue we had was in new york city where we had a higher level of density than we wanted, especially in the new York City Parks, especially with young people ive been as direct as i can and as blunt as i can on young people and the misinformation that they have you can catch the coronavirus. You may think you are a superhero, youre really not you can catch it and you can transfer it. Which makes you dangerous to the people who you love. But the new York City Parks have been a problem i saw the problem myself firsthand. I spoke to mayor de blasio, i spoke to speaker johnson, we said come up with a plan in 24 hours that everybody agreed with they came up with a plan were now implementing that plan i signed off on that plan. The plan is going to pilot closing streets in new york city because we have much less traffic in new york city, we have many fewer vehicles in new york open streets people want to walk, they want to go get air, you want a less dense area, so pilot closing streets to cars, opening streets to pedestrians the well also enact mandatory playground social density, probably a new concept. No close Contact Sports in a playground no basketball. For example. You cannot do it were asking people to do that on a voluntary basis if there is noncompliance with that, we will then make it mandatory and we will actually close the playgrounds. We dont want to do that because playgrounds are a place to go out and get open air, but you have to exercise social distancing thats new york mayor cuomo with his daily coronavirus updates in whats the hardest hit state in terms of the outbreak well continue to monitor that, bring you any headlines from there. The dow and s p are higher trying for the second day of positive gnsai well take a commercial break. Stay with us yes. Its the first word of any new discovery. But when allergies attack, the excitement fades. Allegra helps you say yes with the fastest nondrowsy allergy relief and turning a half hearted yes, into an all in yes. Allegra. Live your life, not your allergies. We segetting to patientscines in record time. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. Welcome back were going to get an update on the coronavirus and efforts to slow its spread. Sue has that for us at headquarters. I do. Good morning, everyone citing the coronavirus outbreak, russian president putin delayed the vote on amendments that would have allowed him to stay in power for years to come russia is reporting a 30 increase in cases since yesterday to a total of 658. Moscows mayor says the numbers are too low because of insufficient testing he describes the situation as serious. Italy set up roadblocks to make sure drivers have good reason to be on the streets. They must carry a document theyy see a second wave of coronavirus if residents continue traveling. Iran has the highest death toll from the outbreak with more than 2,000 dead before calling the meeting to order, everyone wash their hands with soap and hot water for at least 20 seconds. And that is Warren Buffett voicing a Public Service announcement on coronavirus precautions. His key message, invest in yourself he teamed up with genius brands, the childrens Media Company that produces