Bank lets check the numbers and see where we stand the dow is off 1. 5 . 24,260 s p at 2900. Russell, all the way on your right. Its been a big out we are forming giving back about 3 today. Were going to look ahead to those earnings tonight but we have to look back to last night. You own facebook, microsoft. No wonder these stocks have been doing so well. They justified the it last night, didnt they they did. When facebook comes out and says ad revenues have stabilized, thats a very powerful statement. Weve had this debate is old tech tired or is big tech tired. Can it keep giving we saw their operating morals are fantastic. Apple may be the squishiest of all because they are directly tied to the consumer phones. I phone it im not doing anything with it so what . This is where you want to be you want to be in whats working because the companies are bilts to work. Its where technology is and where its going 5g as we talked about so many times. Funny you say that. Kramer said so Many Companies were built for times like this are we at the point we need to discuss these are differencive names . Thats not a new thought by me they have shown you why they are considered defensive names right they dont have the issues that disney or even our Parent Company comcast have because of those theme parks, the traffic that needs to go in there. The fact you dont have sports in the case of disney. Obviously these are things that hurt those kinds of companies but for a company like microsoft thats got azure, the cloud and so forth, that has xbox which we saw a dramatic jump in xbox. People going through this platform people playing games because they are home more and all the rest and that upgrades not because its an upgrades cycle but because of something exciting but because people had to they were using those and those are on the microsoft operating system microsoft wins all three ways there. As far as facebook, one thing about that company is its extremely sticky they added 11 growth year over year to 1. 7 billion daily active users. Thats amazing one thing we know is people talk about quitting it all the time they talk about security but rarely do they ever lever it what about the idea of the stocks being tired its nothing, no news flash here that these stocks have been considered defensive is there any thought its time to take profits in whats been a pretty good run for a lot of these stocks as it relates to the Technology Companies all referenced here between johns comments and steves comments, i would agree one can be defensive by the nature of their Balance Sheet, cash, not extensive debts, the growth rate that demonstrate these companies can have less than than cyclical and coming out of this maybe the stocks will stay here and take some of those gains that they had and led the market here. In my mind these are Strong Companies with the Balance Sheets that can get us through this crisis and also once we get more consolidation in this market rally, thats coming out of this as well. Theres been a lot of talk these stocks are tired we do have these two or three day rallies in value and people get really excited because its like spotting an oasis in the desert unfortunately, that always turns to out to be a mirage it fails to arrive or doesnt last long enough to be actionable or anyone to feel better about that side of the equation the best trade over the last ten years and that trend is being accelerated in this environment, the best trend over the last ten years is look at a very nontraditional metric like that has been the trade then when you think about the stay at home version of our regular lives, look at what azure announced in the look what microsoft said about a sdurazuer. 59 growth in cloud. 59 and theyre already the biggest. Look what google said on youtube. 22 growth in subscriptions. I dont know anyone that has a subscription to youtube but i guess thats a thing they made over 4 billion with it and 33 growth in youtube ads. These are trends that have been in force for a decade. They make it really hard to say i want to have a portfolio that und underweights these names its hard to do that apple is different than the services arm we know about that i think thats all correct and each of one of these names are Core Holdings. They have a stock price in the absence of buy backs were going to be living in a covid19 post investment environment. Thats why they are Core Holdings they can be tired and they have been tired in the last five days youre seeing today a microsoft barely changing unchanged in the last five days you have amazon unchanged. That doesnt mean youre getting out of these names youre looking to understand they are Core Holdings universally, all i heard was every one applauding the fact that the russell and small caps were moving higher there seem to be a clamoring towards that trade. That adds a level of risk given the move itself. What about that for amazon how do we feel about amazon going into this number knowing the move that its already had josh, i guess with you well, technically it looks great. They always look great right before a big move lower because every one is in when they look great technically. Fundamentally, is any company on earth better positioned for this moment than amazon probably not does anyone disagree with what i said is anyone not aware of that . Probably not could it be over crowded or due for a pullback absolutely if you stuck with it quarter after quarter, you know theres always that one quarter during the year where they thick thest thumb in your eye and throw a bun ch of expenses you werent expecting. Jeff, basically is operating at a scale and scope that no one else on planet can match he can enter new businesses at will he can exit things that didnt work out at will nobody criticizes and the companys got a great position in terms of its financial flexibility. You could say its gone up a lot. Look theyre doing it should have gone up. Its no big secret. We all know why its up the way it is. Just because its crowded doesnt mean it has to go down is the expense line going to be higher maybe. Maybe theyre good expenses. They added Human Capital because their demand has been overwhelming 757,000 n,000 new jobs coming youre both right i dont hear anybody saying if it pops 5 , get me out it doesnt mean they are right there really is nobody better positioned for this than amazon. Are they going to throw a bunch of expenses at it, yes i dont see this as one under pressure i dont know its got a lot of leap left to the up side based on everything its done so far if theres any leap left, lets talk about the market at large. We have been debating every day whether the market quote unkwoets unquot deserves to be where it is. We believe the equity markets may be suggesting an earnings recovery stronger than one could logically perceive may be under way. You get the first comment on it. Actually some great comments there. I would argue that one, were in a market that has certainly reached fair value and is absolutely disjointed from whats happening on the ground economically with the claims out today, 30 million unemployed were in front of some very blunt and negative Economic Indicators over the next month we have Companies Across the board, consumer company, facebook last night saying that q1 was not the worst q2 will be even worse than what we just saw and the markets are not pricing in that were going to have another significant cut to earnings in the Second Quarter and this is a market that is looking at the white swan event as well call it from gilead, yesterday ignore whing t is the black swan of the economic data. At some point the market has to return to fundamentals and what the earnings picture will be were in a black box of that earnings picture with 80 of the companies that have reported thus far that have suspended or pulled their guidance. Its a very critical juncture in the market, in my mind steve, tom is not dismissive nor is he naive s p 500 rekocover he thinks earnings then some people are expecting that you could get a faster recovery in earnings if you have a slower recovery in overall gdp. Thats a provocative thought you may consider it controversial and you may disagree with it wholeheartedly. You tell me. Unquestionably the market should not be where it is. Its tale of two cities now. You have a company with no real size of improvement and youve got a market thats had an amazing move higher. Here is where i think tom lee is wrong is hes talking in a generalization as we see Companies Cut capex, that will filter through the whole economy. Theres some companies that will do well and theres some companies that had been doing well id be still worried about the cat t caterpillars united rental is way over done capex is not coming down with leverage to energy you have to be very focused. There are parts that will work and deserve to be where they are. Thats names i just mentioned and the others shouldnt be where they are some will do welcoming out of this josh brown, all things being equal, steve weiss is right. The market doesnt deserve to be where it is although thats a loaded word. All things arent equal . Right. The federal reserve, what the fed has done with its unprecedented level of liquidity has made it so all things are not equal. Lets play that word, which is controversial to use when you talk about where the market is and where it maybe should be deser deserve all things are not equal. Im going to Say Something that is a bit controversial but if there were no coronavirus outbreak this year, i think the stock market would be right where it is now which is so bizarre. Think about what we would be dealing with we were already pushing fairly high valuations. We were already in situation where we knew the fed would act one more time or two more times for the year but would probably be done. We were ricochetting back and forth between 2 and 3 gdp quarter to quarter without much in the way of quote, acceleration we didnt have strong Commodity Prices housing prices were tame we were in a good economy. Not the greatest of all time as we heard from the podium i kind of think stock market review right here any way. That shows you how much the fed and the treasury have thrown at this situation so quickly. The fact were still in the same place with this mass iive outbreak we do this with clients as an exercise all the time. If i told you in january we would have 26 million lost jobs in five weeks and showed you what those charts would look like on industrial output and consumer confidence, you would have said, oh, my god, it looks like an alien invasion took place. If i gave you those numbers, you still couldnt have told me where the stock market would be. Youd probably be talking about dow 14,000 thats a very important reminder of why its so hard even if you get the economic numbers right, you still dont know what the government is going to do, what the feds going to do and what the crowd is going to do we should have, joe, maybe we should have learned our lesson, so to speak, the last time we had a crisis this one is bigger than the last one. Its just a why we are, where we are even laurie says the rebound seems legitimate its fragile i think everybody feels like its a little ragile the magnitude of the move and the composition of leadership are in line with the recovery trades associated with past recessions is she right one of the things thats been a guidie ining indicator with m the last five or six weeks and we should probably talk about it more but its the credit markets. They have taken the Systemic Risk out of those credit markets. They stabilized them and youre witnessing the month of april that is historic in terms of its performance for Investment Grade and high yield Investment Grade is higher on the year i think the beginning of what youre witnessing in the equity market really occurred in the credit market. As it relates 100 right. It goads all circles back. Let me finish the fed did that. Let me finish the fed absolutely. Let me finish my thought you used the word before, all things not being equal i completely agree with you. Lets understand the s p 500, its not an equal index. The s p 500 is market cap weighted if we want things equal, change it and make it equal weight. Its significantly lagging where the s p 500 thats market cap is you had a conversation that went from such and such to they went to the credit markets and raised billions of dollars in debt and theyre all good now. We dont have to worry about said Ticker Symbol anymore because the markets became accessible in a way they were n unaccessible, inaccessible just a few weeks ago. True. The markets did not freeze up. Thats what the fed was so aggressive with. Congress making several moves to joes point, it depends on the market youre measuring. Is it all those stocks the dramatic outperformers and a very small segment of america is employed by those companies. If you want to say how are these companies doing and why is the market up versus the economy that we have 30 million of us, americans, out of work its pretty easy to see why because of what were measuring it against its like we have stacked the deck on the one side we have this cap weighted index against 30 Million People out of work the citigroup was an interesting Statement Today where they said, obviously, this cant go on forever. I agree. It cant go on forever in terms of the fed induced lift or the hand under the market, but, hopefully, the economy comes back around. Thats why the congress, thats why the fed have thrown so much at this so that that can happen rather than just the free fall to 14,000 like josh says or some other level in the dow margaret, it may be as simple as danny said when he asks what is the market thinking the market has been cornered by policy makers. For now, thats bullish for asset prices maybe its just no more complicated than that. I think it is more complicated than that. We had the v shaped rekocover ri driven by the stimulus it will not be a v shape recovery across the various sectors of the s p think of all the areas like travel, leisure, lodging, brick and mortar retail. These are areas where the consumer will take a considerable amount of time to get more comfortable with those areas of their overall demand and i think its important to focus on the active management within those sectors and the companies you invest in. I think this environment has also redefined what Quality Company is and those companies that have taken an extensive debt, maybe they have been able to reprice it. Its areas of the market where their cost of debt is going up default rates are beginning to go up on the lodging sector, the retail sector. That means longer term imp implications for the kmasmaller companies that are being hampered by this pandemic. The markets really be propped up indefinitely. Thats essential sort of issue were discussing why are we here and where are we going from here . They wonder whether they could be propped up indefinitely they say the gap between marks and data on economy is the largest on record. Thats exactly what were talking about, right positioning is super defensive if youre talk about microsoft to some of these tech names as being defensive plays as we were discussing at the open it have show theyre right to ask that question without a doubt i think the way you look at the fed and powell is very clear, theres more to do they will keepdoing it its unlimited Balance Sheet here is the optimistic dialogue. Im not saying i necessarily subscribe to this. You look at the first quarter. We had january and february which most companies, even the worst affected Companies Said it was pretty good and steep fall off in march in the Second Quarter were seeing the worst of the economy in april now as states open back up, as businesses go back to work, people go back to work, we can come out of this, the Second Quarter going into earnings with momentum to the upside in the economy. Now as margaret points out, some just arent going to recover for a long time, if at all the headline dialogue keeping in mind the backdrop that historically markets are up 85 to the time so youve got to be an optimist to be invested what really pisses me off is a lot of people are getting this they are buying when stocks get hit. I liked it when everybody would puke it and give you an opportunity to go in youre not getting the opportunities on the great names as much as you used to i think the market is wise to, some extent. I do think were extended which is why i sold part of my lulu position i think you have to be prunts. To go risk on this environment when the fed is there and is going to be there is the wrong move maybe you need to go risk neutral. Its hard to tell somebody to add fresh money to a stock market that were questioning whether it deserves to be where it is. You have to be cog any sants cognizant of the fact you could have good news lets talk about the moves that all of you are making. Joe, you sold jpmorgan you sold wingstop and you sold the hyg. Talk to us correct again, top of the show i talked about managing and mitigating misi risks. I got a look at my risk and ive got to manage that jpmorgan, ive been trading around that. Lower 80s to mid80s has been a buying range mid90s to upper 90s is where i want to take profits on that i have significant financial exposure im comfortable with that. I dont like the tenyear treasury is falling back toward 58 basis points. Hyg, i dont think the universal investment application towards Corporate Bonds is going to work at this level. I think you have to mind for specific opportunities going forward. Thats why im out of that wingstop, i got lucky. The stock fell down to 44 in the peak of the march sell off got off to 120 the other day on a lot of positive news surrounding its online platform. Im just ringing the register, taking profits there and understanding i bought starbucks the other day. Margaret, this is interesting to me because you definitely sound a little more negative, if you want to use that word. Cautious, to be more fair to you and your point of view, than the others do. Yet, you only have 5 cash which you say is high for you. Talk to me tell me why. For our client base and my client base, were in fullyfolio