10 , but lets be honest the markets are still down big time this year so cold comfort for investors who may have gotten in toward the end of last year well dissect all of that. One big theme today is the Federal Reserve effectively riding to the rescue of the bond market and even the etf bond market look at the hyg, something we have been highlighting and were going on more than a month now up 7 as well as the fed as it says there goes all in and we are all in with a great lineup for you again. We have guy, tim, weve got karen and weve got steve grasso it is going to be a beg hour we have Paul Macaulay with rare mineral supply chains and i want to get to steve grasso because the Federal Reserve, and i know it is very difficult for the audience out there who is not doing this every day to keep track of the alphabet soup of acronyms the Federal Reserve came in today with another 2 trillion program. Did they effectively bail out a big part of the etf market yeah. I think they did so the fed has always sort of said frowned down upon buying risky assets or junk bonds today they said theyll be buying junk bonds and theyll be buying collateralized mortgage obligations and buying cmbss, and theyre buying anything that was in danger of failing so, brian, on the show we were talking about the hyg, you mentioned it we use that as the Risk Barometer and they told everyone that the market and everything is not going to be allowed to fail in 08 and 09 it was too big to fail and now its no one will be allowed to fail. So im not saying were completely out of the woods, but its extremely difficult to sell the market and the next 30 days to the next 60 days because nothing is going to fail Balance Sheets dont matter. Earnings dont matter. The fed will be buying everything if youre in poor shape youll be bailed out. If youre in good shape youll put up acceptable numbers and your stock will rally. It is not really a pollyannaish view. Yeah. Its just really realistic. Nearterm, its impossible to buy anything that will fail. Bankruptcies, no one is thinking about that right now will it happen maybe, but right now its about bailouts and stocks that are performing and its about virus counts, death counts so i dont want to belittle that no, we never would. Guy adami, the numbers are staggering when you look at what the fed has announced already. You multiply that by possible leverage from the treasury, okay we can easily get to 10 trillion with a t, maybe we need it i have no idea, but i do know this, to steves point, we have never seen a fed that this makes the Great Recession and financial crisis look small by comparison. Its amazing, isnt it . Obviously, a lot of people spoke about it today i find it not ironic that on the day after Bernie Sanders gives up his run for precedence they weve gone basically Bernie Sanders. Weve effectively now privatized wins we socialized losses and theres this belief and maybe rightly so that the fed has our back and theyll buy everything i mean, that in and of itself is extraordinarily problematic. I mean, with that said, i hear what steves saying and i think to a certain extent the four of us on the show tonight have said similar things and i think tims probably been the most bullish and steve has been saying the 2790 level is within reach for a while. I know karens been absolutely optimistic and here we are, again, not ironic that we close at the level that a lot of us have flagged for a long time in terms of the market, if you take the fed out of the equation, if the market on a valuation basis is probably exactly where we were at alltime highs if you take at what probably would have been 160 worth of earnings and a lot of people think its less than that and something that scott minerd has said still resonates in my head he has brought up that 1700level in the s p a number of times im not saying were getting there and maybe he looks back and says now with the fed in the game theres no way we get there, but its something that still sort of sticks in the back of my mind look, here we are. I think the market is on better footing, but for probably the wrong reasons. And tim, listen you know it, were all active on social media for some reason and you say all of the negative people on cnbc is wrong and look at the market soaring and they must be fools. The market could keep going up and i have no idea because the fed programs im sure you will agree with this, and if you dont, let me know that we have to be careful here a couple of days where the market bounces in a Terrible Market does not mean the allclear signal has sounded, does it . No, but fundamentals are not playing to the fore here so, look, my view is that the pain trade has been higher and could go higher and today the fed ripped the face off of shorts a price pledge to buy corporate debt into the highyield market and absolutely just completely threw this market upside down. Woe talk about too big to fail and this is where i get a little bit more negative and pessimistic as some of my colleagues here. I think Society Fails when you ultimately get into the dynamic that were painting here i think fiat currencies is an endangered species with this kind of activity having said that, again, healing in markets what do you want to look for how about the aussie dollar thats up 14 in 15 days thats a measure of china and reflation and a measure of commodities. How about treasury volatility which has essentially flat lined over the last three or four days, certainly relative to where it was and how about the japanese yen which is the funding currency which is back to sixmonth levels and again, when the yen was rallying and it looked like we would go to 80 enit was time to run for the hills and were back to where we needed to go im looking at the Retail Market and if you look at the xrt etf measuring the retail sector, its outperformed the s p by 11 over the last four days. The parts of the market and again, there are obviously extensions of the parts of the economy that we needed to see recover more and were the most offsides are the ones that have obviously outperformed here. When i saw, karen, the moves today i instantly thought about you, you know why . Because i know that youve said that youve been short a lot of high yield, but long the banks well, today i thought, maybe karen loves and hates this because high yields surged because the banks bailed it out and the banks rose today j. P. Morgan up 4 . How did you read it . I didnt know what to make. Love it or hate it and not that much change in the p l, but i thought the fed actions were just absolutely extraordinary today. They had to be were in extraordinary times, but to me its reminiscent of 2008 and i want to talk about the one that was so interesting to me. In september, lehman had just failed and things were really coming undone. The sec actually said you are no longer allowed to short financials which was an extraordinary measure, and i think we have a chart that showed where the bkx index was right around september and what happened in the two days following that, the bkx index was up 28 in two days which was extraordinary and the kind of reaction that were getting now, but then, as time went on, and it became clear that those kinds of shortterm policies werent going to be enough if we step back and look at a few months later, the bkx was down75 im not saying thats whats going to happen right now in the ayg and i am saying this is an extraordinary move by the fed. I dont think it nsly means theyre give young the at the money put, and a lot of this money that they talked about today is going to debt that is newly rated debt, newly rated junk, im sorry, that was Investment Grade before march 22nd and now will not be Investment Grade due to whats happened thats where the focus is going to be. So its obvious, those kinds of securities traded really well. Its important to note, this is huge for the Insurance Companies and theyre the largest holders and this is huge for them if there is a buyer of last resort. What you have foul lowed closely is the nav which is the price of the hyg and the others the fed has said even if theyre going to buy etfs, theyre going to be trading eight a premium to they wont say how big of a premium, but at a premium to the av i dont know if that means the fed would no longer buy them right here, im not really sure. The measure is huge, and i sort of think this will not mean that companies cant fail i dont agree with steve that companies cant go bankrupt. I believe they can i dont know that the fed can save everyone. I do applaud them taking extraordinary measures because we are in extraordinary times. It certainly is, and some of these closedin funds that we are talking about the pci of pimco. Dhy of Credit Suisse ive been waiting all day for this opecplus meeting to wrap up and a couple of hours ago, their we did not report that opec will cut 10 Million Barrels a day starting may 1st of this year, but only for two months and then they cut 8Million Barrels a day through the end of the year and 6 million a day through the beginning of 2021 through april of 2022. A lot of these numbers were thrown out there today the market didnt like it. Oil did something its only done three times in 30 years and that was move 20 in a day. It was up twefrl at one point, down 9 for a 21 swing it closed down there and well get more on oil. All right. Lets go back to the markets and really what we just talked about is making financial history, folks. For awful reasons, obviously, with covid19 we are rewriting a lot of history and we rewrote financial History Today with the latest program lets bring in someone who has lived it, studies it and knows more about it than almost anyone out there on the planet, that is Paul Mcculley from pimco, and without getting into the Federal Reserve act section 133 which is the jump ball gives the fed semiunlimited powers. In your view, did the Federal Reserve today if credit controls e quites and junk controls credit, today, in a way did the Federal Reserve bail out the u. S. Stock market . The short answer is yes the longer answer is its not just the fed what the feds doing is very much in concert with what treasury and congress are doing. So i would say the bank of uncle sam, we, the people, our government essentially ensured that our economy is a growing concern even though it shut down and believe me, ill be the first to give a salute and a high five to the fed, but i think its important to recognize that this is a joint venture with treasury and the congress, because congress has got to allocate the lossabsorbing capital for all of these spvs that the fed is creating which then they can lever 101 with helicopter money. So its a beautiful cooperation between the fiscal and monetary authorities and the stock market thinks its really cool, and i do, too. Okay. Spv, special Purpose Vehicle and one of these other threeletter acronyms we havent heard in 13 years and now theyre coming back, paul let me ask it more directly. Do you believe that the taxpayer we forget the t. A. R. P. , do you believe that these programs will all or some ultimately pay for themselves. I think that will know the advertise in, the one i focus on the most is the pp facility. They said they would take those loans originated by banks at face value as collateral into the special Purpose Vehicle and we know categorically Congress Plans to forgive those loans so essentially thats one where the fed will get losses, but they actually wont be the fed losses they will be absorbed by the treasury so this is very different than the financial crisis where actually the fed did make money, but this one is designed to quote, unquote, lose money on the tpp facility and that money has come from congress and if they need more, i would bet my last Dollar Congress will appropriate more the tpp is the essence of getting the economy Going Forward at a agreeing ask the bankruptcies, i would. For our viewers, its designed more for the small and mediumsozed that you have come to my lot a lot, and i dont know if i have been needed or not and ive been critical of etfs in terms of Market Structure and does it have lick id w liquidity, and did we get bailouts of etf and etf providers in your mind theres no question this thing has moral hazard all over it because it is a very macro program, and there are beneficiaries that when we sit down and say should there be beneficiaries and the answer would be no. I think that will be an outcome, but the bottom line is they had to go macro and they did and you like it Paul Mcculley, we appreciate having you on the program. Hope you have a great long weekend. Paul, well talk to you soon thank you very much for your insight. Very valuable at a time like now. Take care, my friend tim, i want to go back to you. This is something that weve talked about for a long time and concerns about liquidities here. In your view did parts of the etf market and maybe etf providers get a bailout today . Well, by the way, love the professor who was mine back in the day. I think if you look at whats going on with the Asset Classes especially with assetbacks and mortgage backs and we heard about the large Mutual Fund Companies and i dont need to name them, but they are household names that had liquidity issues in a couple of the funds. I dont think the fed is focused on that. Again, i think the fed is more focused on credit and the underlying credit and the underlying things that make up those etfs and therefore, i think the run on liquidity for a Fund Provider is very different than the run of liquidity for the names in my view even though ultimately the funds are the ones that are puking they have to meet redemptions and they have to puke out securities where there is no bid. To me, the most important thing and the most dominant thing that happened today was the fed stepping down into junk and saying they would be buying downgraded corporates and be willing to take them out and that relieves so much stress on the system weve seen a fair amount of thaw in the highgrade market and taking this out of the highyield market and the specter is what the fed is focused on the fed with their words said forcefully and creatively and whatever other adverbs we used and those were the things that came to me from the feds Statement Today around what they did. Yeah. And what they did is they front run some of these credit agencies and to tims point is when we see this spate of downgrades over the next couple of weeks and month, the fed says we have your back, junk bond market great points there as usual. We have more new on cnbcs fast money and the holidayshortened trading week and remember the markets are closed tomorrow. Cnbc as always, open for business tonight at 7 00, the markets in turmoil special. Sticking with us, it looks like opec plus has a deal and the oil markets at least when it traded did not like it and well talk more about that and a company that says whats oil well talk more about tesla and at gng on there. Stick around y a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Shbecause xfinity mobilehen ygives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. All on the most reliable wireless network. Which means you can save money without compromising on coverage. Get more flexible data, the most reliable network, and more savings. Plus, get 200 off when you buy an eligible phone. Thats simple, easy, awesome. Go to xfinitymobile. Com today. Welcome back. Lets talk about oil and opec for just a moment, shall we . Because opec plus meaning opec plus russia and other members held a Virtual Meeting today you saw a shot like zoom with 40 different countries, opposition by mexico toward the end, reports are that there is a deal being reached and 10 Million Barrels a day for a couple of months and 6 Million Barrels a day being cut for effectively 2021 through half of 2022. The market did not like the numbers at first look at wti crude and oil did something today its only done three times in 30 years, moved 20 in a session intraday. We were up 12 at one point and down 9 . Look at that weve done it twice in a month, steve grasso the only other time we saw this kind of intraday volatility with oil was all of the way back basically when we all had a mullet, january 9, 1991, but the oil stocks they still rose today and was that because the fed or was it because Something Else fundamentally . I think it was both so the fed, a lot of these companies have weaker Balance Sheets and that was the arm of it that was going to be the bailout for them, but obviously, everything is reliant on opec and the cuts, but that headline number and the 10 million barrel, its not really going to be as high as that and the dedicated players in the space feel as if opec was serious they would have cut now and not waited