With you great to see at least your picture here and hear your voice. I want to start with the markets in general and warren buffets comments his comments appeared to go against popular wisdom i think in how to manage investments he sold airlines low, didnt buy anything during the historic selloff i wonder what you think from a Research Perspective how investors playing at home should what they should take away from that after having one of the worst months ever in march april has ended with one of the strongest rallies in about 30 years across a number of benchmarks the s p 500, the nasdaq, and u. S. High grade. So i think that you should expect some consolidation this month. Now there is just so much liquidity in the system. We estimate the Central Bank Balance sheets will expand 17 this year. You dont bet against that we still think you should be, you know, constructive, but consolidation is in order. The markets responded the fastest, the virus and the economy last and the data prints we see coming out are going to be pretty negative here. I would look for consolidation, although i think theres a strong level of support just from the measures that have come out from the central bank and another fiscal package likely to go through the congress in the coming weeks as well we also want to bring in Neuberger Berman chief Investment Officer joseph amado. Good morning. Good morning. Good to be with you. Great to see you. So looking at the markets, the s p is roughly where it was a year ago, though arguably for different reasons. How much would you say the fed and Monetary Policy are playing into the levels that were seeing right now and what should investors be wary of while factoring that well, i do think the policy thats been put forth on monetary side and fiscal side has had a big reason that the markets have moved up, particularly on the fed side its very much been a liquidity driven bounceback and i think what you want to be wary of is markets have moved a lot at the large cap level. At the same time its very much a two tiered market. Large caps have done as you said, theyre about where they were a year ago. Theyre, you know, down modestly year to date and given the cataclysmic Economic Situation were in now you would think markets would be down more very large high quality market of the segment, small caps have been hit very hard, you know, small cap indices are down 25, 30 right now even though large cap quality if you look at the large cap Growth Stocks theyre down less than 5 year to date joseph, i want to get your thoughts on the fact that we have seen appetite for Investment Grade credit in recent weeks, just saying that based on all of the capital raises weve seen across Different Industries and that munster offering from boeing just last week is that an area that investors should be participating in more . How should how could, how should they be doing that . So we are comfortable with the quality segments of the credit market. We think credit represents a better risk adjusted return prospect than large cap equities at this stage and as you point out it was a very significant amount of issuance, a record issuance grade were comfortable with the Higher Quality segments of the high yield market. Credit we think is a good risk return tradeoff joyce, i want to get your thoughts on the tension were seeing between the u. S. And china. Theyre ratcheting up again. How much is that priced into the market at these levels and i guess how much is that a risk where the Economic Data thats coming in is so poor and there is so much uncertainty i think the mashgtsz worried this is going to become a bigger issue as the elections approach later in the year. Youve had a number of moves by the Trump Administration that involves export controls, mainly aimed at huawei and a number of rep pa rags bills that have been proposed by members of the congress and on the republican side now i dont think these reparation bills are going to go into law but you can see were moving to a more contentious phase of the u. S. china relationship i think this is going to be with us and come up as a Campaign Issue and seems very difficult to meets the phase one trade targets given the Economic Situation around the world right now. So i think that this is something that well actually remain in the headlines and in focus with Market Participants joseph, i want to go back to fixed income because i think thats an interesting area that i know youve been thinking a lot about. Given how low rates are, given how little we know about what the shape of the recovery is going to be and any bankruptcies, kind of rocks under water for some of the businesses, how should investors think about approaching fixed income investmentgrade bonds and how they should be allocated into those i think you go with the areas sorry, joyce. That was for joseph. Thanks. Look, i think many investors have taken the approach of buy what the fed is buying and the fed has moved very, very aggressively to support the credit markets to ensure the credit is flowing which is a critical element of the recovery of the economy but as i said earlier, i think were comfortable with the Corporate Credit market. You have both the support that the fed is providing, plus many of these companies have very durable business models, low levels of Financial Leverage, and are in a much better position to get through this crisis and come out the other end, more competitive and stronger and able to generate higher levels of returns that plays well in the Higher Quality segments of high yield where again, the companies of durable business models, modest Financial Leverage in the case of high yield are in good shape. Were comfortable and would be overweight credit at this point as you think about the overall levels of Asset Allocation okay. And joyce, your thoughts on that as well, it tell me what you were going to say about fixed income i agree very much with joseph the bonds that are supported by the Central Banks are the ones to be in right now i mean were more concerned as you go into some of the higher yielding segments of the market that dont have as much support. Looking at the Energy Sector we think that you could see a default rate that goes above 40 over the next three years. So were looking at, you know, around 10 of nonfinancial high grade bonds that have been downgraded i agree with joseph, you have a lot of support thats there. The primary market has been very strong right now, but were seeing differentiation amongst the different sectors. The rating downgrade has been concentrated in automotives and energy joyce, finally, its carl, your Research Desk was one of the earliest to start tracking socalled alternative data out of china to sort of gauge their recovery now were looking at a lot of the same metrics here in new york and the states. Are you still using chinas rebound as a proxy for what we might expect in america . Well, i mean china was down 35 in the First Quarter of the year, so you do have a vshaped rebound now that is going to go forward. China can do a lot of things that democracies cannot do so their ability to manage a second wave and youre seeing just with all of the restrictions being lifted, all the protests in the United States is in a far different place. China has the ability to use mass facial recognition, mass taking of temperature, cctv and tracking applications in a way thats very hard for any democracy to prepare for i think you really have to watch what the second wave looks like. You can even see that in other parts of asia, the second wave has been more disruptive in singapore than the first was and also in japan. So i think that china is quite unique in its ability to use a lot of surveillance techniques that other countries cannot use. We think the vshaped rebound is going to, you know, continue there going into the second half of the year. All right we will continue to watch for those signs of a second wave joyce chang and joseph ahmado, thank you. Were going to take a quick commercial break with markets mixed to start this monday morning the s p testing the key 2800 level, currently a28t 17 the dow down 213 stay with us soft music [female vo] restaurants are facing a crisis. And theyre counting on your takeout and delivery orders to make it through. Grubhub. Together we can help save the restaurants we love. Confident financial plans, calming financial plans, complete financial plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Theyre all possible with a cfp® professional. So were working 24 7 toected maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. The immunity of the tech giants when this pandemic comes to a close, maybe we should fear them more than ever, thats the topic of Kara Swishers column in the New York Times and shes back with us this morning. Good to see you. How are you doing good. Its a great piece thank you. Think about it in ways we hadnt really considered. Yeah. The point is that were empowering them because we need to right now. Yeah. But what they do with that power is going to be a big mystery. Well, its an interesting thing and actually in the ensuing week if you saw tim bray, a highranking amazon executive, wrote a devastating email going after activists at amazon and Congress Called jeff bezos to talk about these issues around antitrust and possible misstatements around the use of information to facilitate their business against thirdparty sellers. Theres a lot going on i was not just talking about amazon but all the companies in that theyve given us delivery or Contact Tracing or money from their giant fortunes and this is all well and good, these are all good things and i have no quarrel with these things, except for the press release they love to put out about it, the excessive press releases pat yourself on the back one more time for being rich its really important i think to understand the same problems happening before the enormous amount of concentration with enormous resources and data reach, a. I. , et cetera still exists and has been accelerated forward significantly due to it. Is your betting that government will be a useful check on power for these guys . Yeah, because its been so good so far. No, i dont. I think in good times they were not a useful check you have the one thing that i said last week on pivot, the only thing that would probably do something would be Vice PresidentElizabeth Warren if she was Vice President , she certainly shes part of a bill to stop mergers and acquisitions, and been very vocal about these issues and theyre terrified of her you see Something Like that happening, but in general you have david sis ling and others talking about this, josh holly has been doing a lot of activity and its a bipartisan kind of thing in many ways i think the impetus will be to turn to these wealthy companies to try to bring back jobs and give them things like these liability waivers which are just incredible that the idea is that they are not liable if theyre not not just Tech Companies but all companies if they arent protecting their workers thats just i dont understand why were doing that at this point without some strictures around those things kara, good to see you, and i love the topic ive been trying to ask our guests over the past several days about this, dont you think the breakup pressure on these giants would be reduced after so many people have seen how much we need them, but i do wonder this a, doesnt it justify the valuations that some of these Larger Companies had gotten up to this point, how well theyve been able to weather it, and also might they need to worry about limits Going Forward on how they can expand because that still seems to be on the table chinese competition, china seems to be bouncing back from this a lot faster than other places you want to be like china, i dont think so its not even an argument. China has a lot to answer for in this covid19 crisis, but we definitely dont want a government like that your previous guest was talking about this vshape were not going to have a vshape thing unless we giveaway enormous surveillance issues and, by the way, people dont want to wear masks in stores its not very american to be followed around in that way. People have a distaste for government, increasingly in this country. And so were to get to a vshape, sure, if we give power to the powerful and if we allow all kinds of unprecedented surveillance the question, i talked about before on the Positive Side of this is, what is america 2. 0 what does it look like, what can we change things we need to . Worker protections and Worker Health care is one of the things that i think is going to spark a lot of voters to wonder. Do we want to hand power to these more more power to these powerful companies i dont think anything has changed. Its been accelerated. If we felt that way before, we should feel this way afterwards, despite the fact of the economic distress. Kara, what you said is exactly why im going to play devils advocate for the conversation and say that perhaps coming out of this, the fact that people are so much more dijjized in their daily lives right now, they are focused on things like constitutionality, privacy, data, i mean getting zoom bombed, for example, because were doing so many more of these video conferencing, you know, calls and what not, what if this actually pro pells americans to take more interest in their data and in their privacy and what thats going to look like longer term . I hope so we got cat bombed by my cat but i blurred the background i know its i hope thats the case i think people are quite aware of how much they rely on these things it could go two ways, they rely and like them, like great for delivery, i love delivery, dont have to do this or say hey, im really dependent on a small group of companies and thats probably not a good thing. I certainly know its not a good thing for the formation of new companies and whats interesting i get pushback on this and im talking about capitalism, more companies, more wealth created, not concentration of wealth in the hands of the few and i think thats really what im interested in. I dont think they havent done a good job. They have. They can because they have the money and theyre wealthy and that is their duty as citizens of the country, actually i remember when companies were like this and so im glad theyre doing this i notice in the column, i like tech i just dont want them to have all the power. Yeah. Theres a great profile of eric schmidt in the times over the weekend regarding his influence and kara i wanted to get you to reflect on tim cooks commencement state for ohio state which took a personal turn for him. Take a listen to this. When i joined apple in 1998 i couldnt believe my luck i was going to spend the rest of my life working for steve jobs, but faith comes like a thief in the night. The loneliness i felt when we lost steve was proof there is nothing more internal or powerful than the impact we have on others. What did you make of his general tone to the students there . Its kind of echoed steve jobs own speech before stanford i think it was 2005, maybe earlier than that, im sorry, if i got the date wrong, he gave an amazing speech at stanford many, many years ago about five or six years before he died and it was really moving about death and the importance of understanding ephemerality and i think, tim, is reflecting on that. Hes a thoughtful man. Im not surprised Something Like this would come out of him in terms of a speech, especially at this time. I think its tasteful and adult and its very much him, and so, you know, i think hes older, not as young as all the other internet executives he competes against Digital Executives and being reflective of the person he is. I like thats the part i like about tim cook, very much so hes a thoughtful man. Yeah. People should definitely watch that one and the jobs stanford speech. Thats a classic. If you have not seen a speech and read it, its a beautifully written and said speech and whats poignant, hes talking about recovering from his first bout with cancer and he died many years later, so it has incredible resonance now, and its worth thinking about during this time, absolutely. Yeah. Kara, good to see you. Well talk soon. All right bye. Kara swisher. Words of inspiration and motivation are always welcome. In the meantime were going to take a quick commercial break. Getting a check on the markets right now. The dow and s p are lower for a Third Straight day, off the lows of the morning the nasdaq is positive its up about half a percent stay with us anaging multiple clouds for your business. When youve got public clouds, and private clouds, and hybrid clouds things can get a bit cloudy for you. But now, theres the Dell Technologies cloud, powered by vmware. A single hub for a consistent operating experience across all your clouds. That should clear things up. European markets are set to close in just a few mi