Phase four stimulus package of some sort or another two of the most beaten down sectors of all, energy and financials are todays best performers how about that well have more on that big move lar later, one pandemic thats surging. Scotts miracle grow we tend to our gardens stocks are staging an epic rebound. Lets get to dom on more of this midday comeback. From tylers kitchen to the main set to where you are, to behind me, we have the dow its green its not as good as it was the s p 500 slipping slightly to negative territory the red over there at the lows down about 458 points at the opening bell at the high, the green you saw in last hour we were up about 260 odd points there. Thats the intraday moves. Meanwhile the laggards, youve got industrials and real estate. If you look at the stocks that are really leading the charge, check out some of these. You can see wells fargo, capital one on the financial side of things as some optimism returns about maybe some Consumer Spending and pioneer natural as a mid cap domestic oil and gas producer tyler, back over the you thank you very much jobless claims as you probably heard, skyrocketing again. Climbing to more than 36 million since the pandemic began here in the u. S. Steve. A bleak commentary on those numbers in past hour minneapolis fed president commenting on the unemployment claims calling it very troubling and saying its hard to know if the labor market or the economy have bottomed. Any mreturn will likely requirea vaccine or mass testing. Total claims over the past eight weeks 36. 5 million unemployment claims filed expressing the wide spread pain in the United States from the shutdown. The percent of eligible employees who can get benefits, 15. 7 . That differs dramatically by state. All of these big states here, michigan, nevada, one in five, one of four eligible workers then there are states with the fewest claims. They didnt experience the big shutdown states like florida with a lot of talk there they they are not processing the claims. One more bit of data the fed with a Household Economic development were doing a special supplement for april finding one out of five households reporting they lost a job or reduced unemployment 90 of the people who lost jobs were temporary but they dont have a date. In just the past hour my colleague did a story suggesting maybe a bunch of these thought to be temp area could be permanent. Lets talk about this landscape. Many hopes are riding on further support and stimulus from the government with trillions of dollars already on the table, hoump is enough always interested to see how youre coming at this. What are we talking about in terms of trillions and to put it bluntly, does it matter . Do the trillions scare you do they have any meaning are we in a some postdeficit new normal what do you think . The size of the deficit doesnt matter right now the important thing is it needs to be as big as necessary to bridge this economy to the other side of this act of god. Thats what chair powell was saying yesterday we had to shut down this economy as a health issue and we will open it up on the viruss term, not on our terms and between here and there, the fed is all in and Congress Needs to go deeper in. The deficit cant be too big right now. I think theres something to be said for lets wait and see how these initial rounds of trillions shake out. Theres an elephant in the room and thats the fed 6 trillion main Street Program which kind of very slowly starting to scale up if the fed hadnt said they would do that then Congress Might have done more actually, the main Street Lending program is a joint venture between congress and the fed. The congress provides the equity and the special Purpose Vehicle and the fed provides the leverage congress has passed equity thats the important issue right now is the fed, as jay said yesterday is in the lending business its not in the grant making business and congress is in the grant making business, including the equity that goes into the main street facility basically jay said, ive done everything i can do and i will keep doing everything i can do but congress has got to give some Fiscal Relief only congress can spend money. The fed can just lend money, including to congress effectively. Steve, i want to bring you in here to know what youre thinking through i want to engage paul with this new idea i have this Corporate Bond program has shown up that maybe the fed has been barking up the wrong tree all these years about the financial crisis about how to stimulate the economy. When i look at whats happened in the Corporate Bond market as a result of the Federal Reserve announcing it will backstop the Corporate Bond market, its been nothing short of incredible. Thats real credit creation, real money creation. I think the fed has stumbled on a fool here that its not going to let go away if half of the economy is financed in the Banking System and the other half through the public bond market, the fed stepping in to help the public bond markets and the reaction has been way more effective than i ever seen in the Banking System paul, are you there . I think his shot might be frozen for a second. Im going to engage you in that. Youre talk about why dont they just guarantee the stock market. Im not saying in this case i dont understand why they did, kelly thats what im saying. Thats the untold story that is the issue we know it works but should they do it becomes more front and center yes should they do it is a whole other question im talk about from a simple Monetary Policy effectiveness point of view. The fed does not have to guarantee or buy the stocks if effectively it buys the bonds. What it does by providing the Corporate Bond guarantee out there, so to speak or making a market available for Corporate Bond lending is to say these bonds are not going to be wiped out. That means the equity wont be wiped out and i think a lot of the rally we had in stocks was b because of fed coming in and saying you know what, that provides some cushion or floor to the equity market ty. I wanted to ask paul but ill throw it out on the table for you. Im here. Hes back ill ask you paul. You say dont worry about the deficits now its not a concern but were going to be throwing a lot of tonnage in form of treasury notes and bills and bonds into the marketplace. A lot and a lot of them are very short duration it will have to be rolled next year are you worried at all that this massive supply may not have commensurate demand and Interest Rates could go up. I do not worry about that at all. There will be no problem funding whatever we need the United States will be the global currency. I guess we got his answer there. Hes not at all worried about that as he froze up again, kenly. He got the answer in he did. Well try again with paul. Were sorry that was so in and out. I think stooeeve did a fine job ginning up the discussion. Tyler, carry on. Lets give a try with phil auto sales improving for the fifth straight week but demand has yet to snap back in any measurable or big way. Phil with some details on cars, trucks and suvs. Phil its improving. Leets say its not as bad as it was at the end of march. When you look at tlate esthe lat numbers and they track how retail sales are going its not when you buy it from the automaker. Its when you buy it from the dealership the decline last week, down 20 . Thats nothing to write home about but far better than where it was on march 29th when the decline was 59 . The sales rate, by the way, which is measured by when dealers buy vehicles from the auto makers, the expectation for this year is that the sales rate is around 15. 5 million vehicles. Ford holing its annual meeting, doing it virtually they were asked about are you ready to restart production on monday and the president of the company said wii reaere ready start on monday. The question of whether we get to full production, theres no way to know at this point. Gm said they expect to have full production up in four weeks. The wild card is what happens with mexico. Im hearing mexico may not give the full green light on starting production on monday thats crucial because of 40 of the parts were north american production here in the u. S. Come from mexico. And the covid situation down there is worsening delta retiring its triple 7 boeing fleet and warning about over staffing issues in the fall right theyre not just parking them. They are out right retiring them its about bringing down the cash burn which is about 50 million a day. They have 14,000 pilots now. Today they sent a memo saying in the fall, we think we will have 7,000 too many neterms of pilot. That means youll have to get rid of about half of your pilots by the way, next year, 2021 q3, they are expecting to have between 2500 and 3500 excess pilots then. All right wow exactly phil, thanks very much. We appreciate it coming up, well have more on todays market reversal with real estate the worst performing sector tapestry which owns brands like coach, kate spade and others is putting out plan for its path forward the ceo will join us later this hour stay with us theres much more power lunch after this these days staying connected is more important than ever. So were working 24 7 to 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. Welcome back, everybody. The president tweeting today that he is confident that a vaccine should be ready before the end of the year and that he seeing quote, good data from the dozens of states that have begun to reopen. Thats in conflict with comments earlier this week from dr. Anthony fauci. He told congress theres no guarantee a vaccine will work and reopening the economy too soon could trigger more virus outbreaks. In some state that have reopened we started to see case counts go up my next guest says were at a Tipping Point for our health, economy and maybe even capitalism itself. Tell white house is involved and what it does and how its working on covid thank you very much Global Virus Network was established about ten years ago, 2011 it now has a network of 53 Scientific Institution in 32 countries who preparedness it was kcofounded by Robert Gallow its a really, super intellectual collaboration without a lot of bureaucracy i was looking into the website last night and just to do a little preliminary research and i recommends everybody go there. Its a lot of information there. Lets turn to the question at hand and that is the sensible way of eopening the economy. What i call the reopening paradox. We are all that train is levering the station many states have reopened. We know on the one hand that we have to do it. We presume that doing it entails some unknown but distinct risk of higher transmission of the illness and probably death the question is what do governments, individuals and Companies Need to do so we open int intelligently and not out of some defienance that were just impatient and want to get back to work. What do we need to do . Thats a huge question and the right question i think we need to back up we need to agree that the economy does need to reopen but we dont need to think about things in completely binary terms. Its kwae a question of how to e while minute miimizing total ham in a broader sense, i think that we need to look at this as a completely new environment that were in we need to apply basic evolutionary biology to everything that we do, which is we need to adapt we have a problem right now. That is we dont have the instant point of access, testing that we need or we should have the majority of people who have this virus, dont know theyre carrying it. Were uncertain if theres specific antibodies that we can develop after we had the virus and if there are, how long they last for we know that vaccines and cures take time to develop and test adequately this is the United States of america, ty. We dont deny reality. We dont blame other people whether its china or anyone else and we dont wait for government bail outs those are all maladapt ifr strategi strategies we americans get things doej we need to reopen in way that helps to minimize total harm what does that mean . Let me just go to the individual here because i think thats where youre going. We have a Public Health crisis that predates covid and that goes to all kinds of coexisting conditions that this virus takes advantage of obesity, heart disease, copd and other things addressing those things is one thing we really need to do in this country, wouldnt you agree . Totally agree we need to shape up. Covid afflicts the aging body, not just old people. Every one with lifestyle driven preexisting conditions are vulnerable we need to address our unhealthy living, our environmental toxicities that cause aging lik cellular and tissue damage tissue and organ degeneration like cancer. As you said, 40 of all adults in this country are obese. Just losing weight and taking care of yourself reduces your own vulnerability. Then we need to turn around and act with Situational Awareness and responsibility about what were doing and who were doing it with to avoid the potential of millionsof american deaths before this virus. And who we may be putting at risk by our actions that may not be particularly responsible. Two quick final questions. The first one is this. I just asked Paul Mcculley a question you put in my head the other day. With all of the supply of treasuries that will come on th market over the next two years, ten years, how can we be certain theres going be demand to sop it up without having to raise Interest Rates at precisely the same time as the world may be moving away from the dollar as a global currency, global store value and where were having disinflation he wasnt concerned about it are you . Yes, i completely disagree. I heard that interview i think hes drinking from the koolaid that hes used to drink from its inconceivable to me that we can continue to pretend that we can just print money and give it away apart from the fact if you step back and think about the implications of that, we are answering an era we have of state capitalism in the United States of america. I heard congratulatin the fed. What in the world are we talking about . I completely agree with you ty we have a real concern by the way, china is doing business while we argue with them theyre doing business with everybody else in the world. Buying their commodities and selling them digitally infrastructure complete with surveillance capabilities. All paid for in one. Foreigners that own a big chunk of our outstanding treasury will be decreasing their Treasury Holdings as we got 5 trillion of new treasuries being sud this year 30 have less than a 1 maturity when that come up for refinancing, sure people say we should be issuing longer term treasuries go ahead and try it. Steve mnuchin talked about issuing a 30year treasury earlier this year before this whole crisis took place and got nowhere with it. Rates will go higher i dont care what experts have to say i disagree we can pretend its nothing and throw whatever money question at it that is classic maladaptive economic strategy. You have given us a debate that well schedule with you and mr. Mcculley and bring steve into that. Are you worried about how rich the stock market is priced lot of people are. Are you . Quickly, pleased im not especially worried. Theres some under valuations. But whats happening now is stock market is catching down. Danny meyers not going to open his restaurant because he cant make money with half occupancy which is whats required employees themselves need to think about the fact that 60 of all american households have high risk residents in them. Even though youre perfectly fine as a young person who is healthy and in good shape going back to work, if you get the virus and you dont know it, you may infect people you live with and you need to encourage your employers and ask them to answer question before you go back to the office about how theyre going to develop approaches for instant point of access monitoring and reconfiguring spaces to reduce the risk youll be affected. Dan, we have to leave it there. Thank you for your time. Thank you kel fascinating still ahead, real estate is the worst performing sector today. Check out the pain in the commercial players as Many Americans are working from home. Lsg is down 60 this year. Were going to have the story and a traders take take a look at scotts miracle gro. Its shares are near all time highs as it benefits as people spend more time at home om eila a garden. The ceo will join us ahead theres much more after this connected. Ng u so you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. A mastersdgren, youin chemical engineering. , and youre technically a genius. And it appears youre quite the investor. I like to trade. Well, Td Ameritrade has pros ready if you need help, say talking through a new strategy. 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