Today. Lets go to the boards were not at the best levels of the day. Nonethele nonetheless, were hoelding onto pretty good dangains. The dow is up. Nasdaq has some profit taking today. Its been the big winner apple and microsoft and amazon giving a bit back along with some of the other names as well. Pete, im going to come to you first. Youre the one who had more stocks than you had in a long time where do you see things now . Friday have generally not been great because no one want toed go into the weekend feeling long then you had the gilead news last night you have boeing starting next week you have more plans to reopen even in a slow fashion where does this lead us as we head into the weekend . I think people want know how they should be positioned thinking about what could happen next week. Its nice to have a light at the end of the tunnel, so to speak, or something. Some sort of light thats what we got out of gilead last night we had move last night long before this morning. We were up 700 points. Its just an maizing move to the upside it shouldnt be too surprising to see we have bit of a difference in Leadership Today i say that because the financials have been beaten down in this entire week they have gotten hit, hit, hit you have some of the financials finally participating. Theres a lot of different tech names. You brought it up that had been leadership its part of what we like to see. Taking off maybe a Little Something from the netflix and apple and the microsofts of the world that have been moving nothing but to the upside. Giving a bit of a fresh start again for certain other areas. I still dont know whats going to happen with energy, scott we all will sit and watch the price of oil as it got into the 17s and now its in the 18s. Its just brutal what they will have to face you look at those Balance Sheets and thats something everybody has been talk about is the fej side of what makes us look for certain stocks when i look at the Balance Sheets of many of these names its really difficult especially those second tier name where is they have some cash but they got incredible amounts of debt and how leveraged they really are right now. That will be a bit of a problem Going Forward. To see Something Like the financials trading better, the kre trading better the jpmorgans and bank of americas and those kinds of names trading better than they have been, i think theres positives to take away i dont think we should use this big spike as an excuse to take some of those off. They need a lot more than one day and one session. The banks have been dreadful shannon, are you more inclined today to be a buyer or a seller . I think my inclination is probably is id probably be more of a seller today i think theres a lot of credit being given to a return to Consumer Spending levels sort of closer to preccrisis than postcrisis. Im concerned about some of the bottom fishing on the hospitality sptocks. Im excited to add things to the portfolio. I do think theres more negative da to to come. Everybody said we were poised for weak data. Market didnt seem for that data i would say going into this weekend, i wouldnt be loading up here. We dont know what news will be like over the weekend and into next week as we see even more earnings reports and more indications of how slow things really are out there horrible data is going to continue we know that the question, josh, how much of this horrible data is priced in. The market cant be shocked anymore by any of the data that comes out whether its jobless claims or otherwise. Its been terrible we know that its going remain that way for a while. You make a good point, scott. I think the shock phase would be over we all understand the situation that were in. Unfortunately, i dont think the disappointing phase has really gotten under way yet all the things that are probably going to blow up i dont know that Financial Companies have taken enough loan loss reserves and are really ready for these charges just yet. I think they will be okay. Fortunately, the Financial Sector is in a much better place than it is during the last recession. When we look at one days action like today, i understand the dow is up 300 something points were on the lows of the day for all the major averages i dont understand the concept of looking at something thats up a lot today and be like thats leadership. The financials are trading at the same level they were trading in june of 2007. There is no leadership there there shouldnt be these stocks have been harder hit than the overall market that makes perfect sense. If you tell me well have millions of delynn kweninquent o housing to auto to commercial building and were going to get away with being down 16 in the dow and the s p, i just cant see it i take no pleasure in relay thanksgiving to the viewers or you. Im not short the market im not hear to create panic im an investor. Im long im very skeptical we have seen the worst of whats coming i feel its important to look at these massive rallies and say if theres something you want to take off the table, do it. I sold disney this week. I sold nike last week. I took Something Else off which well talk about later im not getting excited about these one day bursts for the russell 2000 which is hammered in grand scheme of thing to that point, pete, you mentioned the bank stocks that are trading better today great. Theyve been horrible. If youre hanging your hat on that to joshs point, i dont know if everybody is getting the ringing in the ear but i am and its annoying. Yes our apologies for that. If youre hanging your hat on the financials, thats straw hat at best and it can get blown off real quick i dont think i said anything about hanging my hat f those are my words. You pointed out how the financials are trading better as a positive sign for maybe how we should view the market i asked how you should view the market heading into the weekend. You mentioned the financial trade as one of those things to note joshs point is these things have sucked. Theyre likely going to be trouble Going Forward and potentially even more so than they are now i think thats the debate were trying to initiate here. Sure. I think josh would agree with this though, when you look at jpmorgan and loobking at a stoc that traded over 100 on tuesday and it got underneath 90 and the fact it has a nice move to the upside today, i believe when i was on monday, josh was saying he was interested in buying jpmorgan he said he might add to it i understand his point of do i believer the financials are going to save the day. I really dont think so. Its change of tone that we see occasionally in the markets where it reverses a bit or switches from what the leadership is daytoday thats been the Market Strategy literally, thats whats been going on probably for the last 18 months or more. The leadership lately hasnt been daytoday. It its been technology and high growth and the laggards have been the financials. Financials, energy. Lets cut to the chase. Would you tell people to buy any bank stocks today . And if so, which ones . No, i probably wouldnt say today would be the day do you dont want to buy the bank stocks when they made some moves. I dont think this is a move thats significant to joshs point when you look at where they are to level now to where they were years ago opinion that makes a lot of sense youd want to look at it that way i think you have to look at is the market showing you anything different than it was. What we have been watching is a market thats had a very narrow leadership all in technology all in fundamental Balance Sheets of five or six or eight big names. Thats really whats been controlling the markets. At some point in time were going to have to move off of some of those names because how long do you expect to watch netflix and tesla and amazon mooump the entire mark move te markets. Its great to see names performing the way they are and i understand why im in many of those names but ill give you an example netflix, because of the move its already made, thats name ill be out of before tend of the day. Its already moving from the downside from where it was yesterday. Still had a pretty decent gain in there i want to take some ofthat out and ill probably be off by the end of the day were looking for other areas of the marketplace to show us that theres some fundamentals about what this market maybe could show im not saying one day, like to your point, one day in financials, its meaning less. Youre totally right were seeing something out of thefinancials because we watches them go well, i mean its gettbettera going down towards the flat line thats pretty interesting, i think. Steve, we come to you now everybody has spoken except you. Take into context what everybody has said and then you can tell our viewers your own view. I am taking the opportunity today to sell some exposure. What we got is gilead driving the market higher. Its progress but its a long way. I own mederna which got money from the government. They are working on preventative thats what we need to see people arent going be happy going back and socializing again if they know that, okay, if i get to the hospital on a ventilator then ive got this treatment. They want know they cant catch it thats number one. Today is one day i agree with josh. We have energy up 7. 5 we have financials up 6 now they are up less than 4 you have to look at what it will look like when we come out of this the Bank Business models arent going be what they were. Every Business Model is probably not going be what it was for a period of time i dont care what industry youre in. Exactly some will be better. For sure. Those are the companies i continue to be in. I am sure some will be for example, the 5g play ive had companies that reported earnings that raised their guidance for the year. Some will do better. They are uber reflected in the stock like a zoom or teledoc were still a long way from opening up in the economy. We have extended that divide who will do better in terms of stocks and others. For example, i sold target it was a quick pop i would have liked to stay there longer based upon that strategy, i bought more lululemon. The damage well see from people who live paycheck to paycheck, which is 75 of the company, isnt coming back any time soon. Neither is good loan demand. Thats how im looking at it i thought we were at the upper end of the range of the day. I also said the magic bullet is a vaccine. Thats still the case. Really high equity exposure. Let me ask you this, what do you think what happened to the market if States Reopen and then have to reclose . What would that do to the stock market im curious what your thought is there is growing pressure from the president to reopen the economy an from others, by the way. On tweeter, the Freedom Caucus is urging the president to reopen the economy thats what they want. The president has tweeted a few moments ago about various states whether its michigan or minnesota or others saying liberate minnesota and then liberate michigan and some of these others theres pressure from the president on governors to reopen if the governors reopen and then are forced to shut down again, what does that do to the market and how much of todays optimism do you think is secentered arou the idea of reopening or is today all gilead i think part of it is around the reopening. My view is its asinine to reopen before we, number one, the testing. We dont even have the testing the uk extended their hutdown for another month. Were going to reopen before we have adequate testing we know that dr. Gotley every night at 7 00 told me theres going to be risks. Were not going to be ready. Were going to reopen certain parts of the economy before we are ready from a testing stand point. Thats the risk were going to take if we have to shut down parts of the economy that we do reopen, what happens to the stock market amid the optimism thats on the screen today and this week for the s p going for two straight consecuti up weeks we breach the lows because you have extended the issue. My bigger concern that we reopen and have to shut my biggest concern is they dont shut down again because were in an administration thats never admitted that they perhaps made a mistake. Its okay to make mistakes youre seeing the republican governors in michigan, which is democratic said we may reopen. You see ridiculous things like naming wrestling, professional wrestlers as essential employees in florida i am concerned about that. I think the market will retrade as we open that will be a good time to take exposure off the market is up on an expanding multiple were fwoback to that story agan we have no visibilities on earning and were expanding the multiple by the day. The wall street strategist types will tell you the market is looking at the 2022 estimates. Because you have rates slashed to zero and endless fiscal and monetary stimulus doesnt give you a higher look at europe and japan, they do nothing but shover money into peoples pockets and pay negative rates on bonds and those stocks are 12 times earning instead of 18. You dont automatically continue to get the benefit of that expanding multiple i want to go back to what pete said i do think there are values being created by some of the things ivebeen pessimistic about. I do on jpmorgan any time im in the same train as pete, that makes me happy because pete is a smart guy. Jamie dimon has the experience to steer his bank through this crisis perhaps better than any other bank ceo i can think of at that tier thats a stock im in. If they take it down to an eight handle again, ill probably buy more of it thats an example of where i would say, you know what, there have been bargains created i have to tell you once again, i do not think that market wide were fully pricing in the number of delinquencies, the number of loans blowing up i just dont the government does not have the money to bail all of them out. They put 350 billion up for Small Business and exhausted it in two weeks most of the people i talk to applied and couldnt get i dont know where it went i have to tell you, we cant just continue to do that for ever thats what im concerned with this could take a very long time to work its way through the system thats why you have, i think, i think its fair to say more views now than not that its a u or an l or whatever it is, but it aint a v there are some who think you can do a v no way. Sorry. The dislocation earlier this month in certain parts of the credit market hit some hedge funds especially hard including that of our next guest Anthony Scaramucci is the founder. Anthony, i hope you and your family a well, healthy and safe. Thanks. You too. Can i just comment quickly on the stock market stuff i agree with josh that things are probably priced to perfection in the stock market but to your point about things like structured credit, were still pricing an apocalypse there. Its probably somewhere in between those two which implies the credit marketers will do pretty well over the next three months as those spreads start to tighten to something more nor l normal Something Better than where we are right now. Can you comment, specifically, on this structured credit trade that wasnt especially kind to you guys in march. Thats the journal story i know you have seen it. Thats the journal story that said you fwies had a tguys had month of march we were down 22. 5 . We liked getting that information out early. If you have unrealized ro ed los and those bonds will still perform but you have a lot of coverage there you have agency kcoverage if you step back and look at what happened, they changed the Capital Requirements on the repo debts and that caused a cascade. Some fwguys were down 40 to 70 it was painful thing for structured credit. A Global Pandemic because it sparks the fears that people will default on mortgages. I want people to step back its like a George Bailey moment in its a wonderful life. Is pain is already in the marketplace. Were priced for 15 to 20 defaults that didnt happen in 2008 despite what people are talking about right now, its not going to happen this time. You have 12 trillion coming into the market from the government just the reason why the market is doing well, you have injected 1. 4 trillion of Balance Sheet capital. Theyre moving at a 14. 5 times faster clip to repair the markets this time than they did in 2008. For those reasons, somebody that studies this stuff, if you look at historical spreads, if they just tighten a little, youll see a real spring in those securities im really cautioning people to hold the line here do not sell in a pandemic because what happens is you get out on the bid side. The bids are very sloppy when the market firms up youll be regretting those sales. I want to make sure people understand what your business does we talk about funds to funds all the time the audience of people watching now is great because people are w working from home. You take money from investors. You pool it, so to speak and you allocate it out to hedge funds have i described that correctly . Thats correct. Its basically a hedge fund vehicle for the mass aflunts our minimums are between 25 and 50,000 we have been doing this for 15 years. We had one bad year in 2008 when the market was down. We rocketed out with a 21 return in 9 and 10. You measure it over a market cycle, the product has done very well its acted as a buffer from other things in the portfolio. This particular instance, a Global Pandemic, that struck right at the heart of what were doing. Sky bridge has a tendency to be very themematic. We were in structured create because mortgages are the heartbeat of america or one of the mayor heartbejor heartbeats. We need a free flowing origination market for mortgages and a secondary market which is why the fed is always in there providing a backstop remember, 60 of the Small Businesses in america, 31 million Small Businesses, 60 are tied to housing. For these reasons, the fed is offering that buffer and youre seeing a big injection of capital right now. We had to position mark ourselves strictly to where we are now. The journal said you have tried to withdraw your money from some of funds you were invested in and havent been able to. Can you comment on that . Thats the part of the journal article that was inaccura