Headlines in the quarter some past underperformers are catching a big bid check out these moves and the financials etf up 9 and xlb materials up 3 and on the flipside, outperformers like tech and health care are underperforming the Broader Markets with the xlk etf up 1 and xlc communications up 1 so is this rotation temporary or will this be the new leadership Going Forward . Guy adami, lets start with you. Hi, mel hi, guy well, just about everything is temporary if you think about it except luggage in the great words of eddie murphy, but i digress. I think it can continue and i absolutely think the banks can continue and kudos to karen who has been talking about the banks and saying the pain trade will continue to be higher in the Broader Market what we have said is banks should be trading higher and for example, j. P. Morgan which weve outlined the metrics that i used that was a 62 tangible book and put a 1. 85 multiple and youre talking about a 118 stock and i absolutely think theres another 15 to 20 on the upside. What surprises me is the s p 500 in the wake of this or in the midst of this rotation continues to grind higher. That to me is a bit of a disconnect, but the banks do make sense we have gone above 3,000, grasso held there we failed to hold there yesterday, so what do you make of the move so far this week so, when guy and i pointed out that 50 retracement from the alltime highs to that 2200, lets call it low in the s p and now were at that 618 and above that, youre honing in on old highs again. So you have to look at the 3924 level in the s p and thats your support and above that, you get to 3109. If we shoot to 3109 its all, but a given that were going to make new highs in this marketplace. The problem is for me what is the catalyst for new highs and you will have an overreach as you did to the upside. Youll have it to the upside, but earnings arent going to be there. You might get a resurgence in corona airlines are not going to be making money hand over first restaurants arent going to be making money hand over first well overshoot. Maybe what you see resurgence well settle back in everyone i speak to is looking at the 3,000 level in the s p. That is your new bullbear barometer right now in the overall market so all those risk factors for the overall market seem like gynormous risk factors for banks specifically, were talking about the lifeblood of the economy and if well be facing these downside risks, banks face them in a more outsized way they do and thats why we are here j. P. Morgan is up 20 in two weeks. Its still dramatically underperformed the market at large, so i thought for a long time that either the market cant continue to go up without banks going up owe they have to converge somehow either they go up or they come closer together so thats starting to happen i think that everyone is optimistic about future earnings and we want to hear about whats the reopening going and what do you see in the future and if we listen to jamie dimon and brian moynihan, both at the center of the economy they seem optimistic about their business so im hanging on to banks i dont know i am concerned that the rally has come too far too fast, but i feel the games a little rigged with the fed there and potentially additional stimulus that, you know, they have put a floor under here. Boeing shares are moving higher and we have breaking news in the company phil lebeau has details. Heres why numbers are move, boeing started its plant in washington that doesnt mean you will see a plane coming out of the plant for the next couple of days and it takes a while for the system to wake up and they said within the last month that theyre waking up the Assembly Line and theyve officially begun production at that plant in renton, washington, and you will see the first ones roll out of there for the first time in the next couple of months and guys, this is the beginning of boeing starting on the 737 max slowly bringing back production and remember, when it does come back and once they get it recertified, if they cant get it recertified by the end of the summer you will not see massive increase in production it will be a gradual ramp up in production nonetheless, this is a being milestone for boeing as it has resumed in renton, washington. Phil lebeau for us in washington is that a surprise to you that weve seen such a pop when the plane hasnt recertified they make these plans and they go nowhere. Who will buy them we should see this pop if we remember the cutting of production was a big part of where we saw the story go off the cliff and part of that was the cost attached to restarting production ultimately, june was talked about this is actually Pretty Amazing that were beginning production and i remember in the last few weeks weve had conversations between boeing and folks like southwest who were in a good position financially to their peers and we will be deciding and we are talking with boeing and were talking with them about damages and we will be buying these planes so this is about the normalizing effect and im long the stock. So take that with what you want. I i dont think a demand in their order book what it was. I think we had to figure out what the order book actually is, but weve gotten past the point where we are worried about the Balance Sheet at least today and focusing on the issues that were the issues before covid19 and it really is about ultimately getting that recertification if it does happen in july and boeing in this time has changed their tune dramatically and become very penitant and found religion as far as what they need to say to the public to modify the faa even if there are other things that have to be done with the software guy adami, is this i mean, youve got not only its own issues which it seems to be resolving at this point or on the path to resolving, but you also have boeing as a pandemic reopening because of the Airline Boost that it could see. Is this the time to be in the stock . Well, good for tim, by the way. Rbc, i think initiated this stock on may 20th with 164 price target and i think and we pointed out on that day something that tim had been saying that the market had been completely discounting boeings defense business and i think now its being taken into consideration. I think i see whats going on and lets get ahead of whatever good news thats coming and if its bad news well have the ability to turn on a dime. Well see if that plays itself out. 180 is when the stock went from 80 to 180 in a Straight Line from early march to april and thats the level youre looking for, but its a good sound bite, but i dont think theyre out of the woods by any stretch of the imagination, my opinion. Well keep track of the stock and back to the markets and our next guest has been trimming te techs, buying banks and lets bring in emily ronan great to have you with us. Thanks for having me. How do you think of the markets in terms of this great rotation will you see new highs in the s p 500 . Well, this sign of the broadening market is certainly a good one in term was forward looking expectations here and one of the things thats been critical here is this huge whipsaw in terms of sentiment. Youve got Retail Investors that have been sitting on the sidelines just hoarding cash over a trillion dollars has gone into money market funds year to date and investors are looking to get that cash off the sidelines and theyre looking at the areas that have been beaten up on a relative basis and you look at technology which we still like, then you look at areas like financials we dont want her around for these classically cyclical sectors in terms of the classically cyclical sectors do you not like are banks the ones you single out mer than others cyclical sectors and classically speaking thosemore tied to the economic angle in order for the longterm story to play out wed like to see some more inflation and wed like to see rates going higher and that really is not our base case for a couple of years here, but theres been a huge dispersion performance and we think it makes sense to take out of those gains like areas Like Technology and areas like treasurys. I mean, lets think about it theres really only been one trade this year, tech and treasurys and thats been great and congratulations for all of the folks that embraced those trades, but the idea here is whats next . We have a long way to go in terms of performance recovery in an areas like drills and financials and it does make sense to lean in at this point you talked about the money sitting in the sidelines in the accounts of Retail Investors and im wondering if during this time and in the postpandemic time, if you see the shock waves through and they see their member losing their job and mib that stays on the sidelines. Does that change anything with the overall markets . The real thing that we see with the cash in the sidelines for individual is the fact that the fed has pushed the short end of the curve all of the way back down to zero so that becomes a problem for savers and we think thats one of the most challenging, you know, kind of Behavioral Finance elements today is to get investors to at least go out on the curve a bit. So yes, i think youre right the savings rate could move higher which could dampen Consumer Spend coming is absolutely critical to this recovery. Not from an investment standing and they try to generate some yield in that portfolio. Thanks so much gr your time, emily rowan does it bother you that theres trillions of dollars sidelines on the part of Retail Investors i guess i would like to see it in those that i own, and i dont know if thats a sign of the top. I do have banks and i do have some industrials that are starting to work names like uri or fedex. I bought fedex recently. I think those have a ways to go. I dont know that its a Straight Line, though, but thats how im positioned. The sector we hadnt mentioned which is catching a bit in that rotation is retail xrt is up more than 6 in just two day, tim yeah this rotation for retail, and for banks and industrials. This is not two days and this is not two days, this is two weeks and i think we just need to be clear about this you had the s p up 8 in eight days, but during that time youve actually seen this outperformance by the groups that i think were left for dead and was very little visibility into where the business was going. I think on the retail side, as we know the xrts and etf, and it contains a lot of the smaller index players and i think if you look at some of the big box and if you look at the hard lines, and if you look at some of the specialty retailers and apparel, some of these were so beaten up and obviously, theres the bottom of the barrel with l brands and what not and macys and we talked about them, but look at Dicks Sporting Goods and some of these other places where you had some expectation where you thought these guys would be dead with the consumer and theyre not and back up their high and this is not a twoday rotation and this is a twoweek rotation where banks have outperformed and the leadership walmart was down 8 and i think you will continue with that trend. There is one economic release that im looking for on friday, and there are a number of articles in bloomberg and the wall street journal, i believe, about pay cuts and how people, workers, may not be losing their jobs, but for many workers out there they are being asked by their companies to share the pain and take pay cuts and that will show up in personal income data, not right away, maybe in next months release or the following months release and you have to wonder how that impacts Consumer Discretionary sending. It absolutely has to impact thats your point and, if you talk to an economy in the at a certain point it matters and i see whats happening with the Broader Market, and optimism wins which is fantastic and when you look at this thing in the aggregate and northful 35 Million People unemployed and you talk about the pay cuts going on it is very hard to imagine us getting back to we were in december as fast as the market thinks and thats what gives me pause and thats why im trying to be somewhat pragmatic with that said, optimism is ruling the day right now and its really hard to argue with that coming up, shares of box getting a pop after reporting results and well break down the results from the Company Trump breaks fresh aim at twitter and we will break do e risks in this brewing battle fast money is back in two. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. You know, the chef here trained in france. Mmm, it shows so good. Oh hey, did you say you needed help with investing . Because i know someone whos really great. And you trust him . Totally. Yeah. We went to school together. Ill check him out on investor. Gov. So, whatll it be . Ill just have the burger. Before you invest, get the full report. Check out an investment professionals background for free on investor. Gov. Before you invest, investor. Gov. Welcome back to fast money. We have an earnings alert on box. It is surging after hours. Josh lipton has details. Josh box is reported on being the top and bottom line and billings came in better than expected at 128 million. As to the forecast, q2 eps is better than expected and revenue basically in line and for the year, the eps forecast was nicely above consensus in terms of the forecast and remember the stock had surged about 130 since that march low headed into the print and i did get a chance to chat briefly. I asked him how has this work from home trend going to benefit his company. They are seeing healthy expansion. Enterprises are new ways now to access and collaborate on content in the cloud and his argument is box is there to provide that for them and 40 deals over 100,00037 he did point out challenges as well in the quarter and he pointed out softness in the consulting business, too, and it did impact the top line and it was the bottom line and what leverage was he pulling and box is driving way better cost discipline at his company. Melissa, back to you josh, thank you box shares up 2. 5 steve grasso, how do you trade this so when you look at these names like these Infrastructure Software names, it is up about 18 , i believe, year to date and it is about a 3 billion marke cap. On the flip side of that you get a 70 name and Bill Mcdermott went to service now and who knows . Service now gobbles up a company like box in the future i would expect box to be the beta play, but its not and the companies that people are investing in have multiple strategies and diversified and are larger cap names in this environment. I would stay with the service now would you rather than myself there against box. Steve go ahead, tim. I know you want to say something. I just wish i could do that as effectively as steve does it. Its awesome so i would be worried about the small and mediumsized businesses and this to me is a quarter of their business and i realize that the enterprise so far has proven to be very resilient for reasons we all know whats going on, but the those of those transactions and its where businesses, and i think thats appropriate given the environment. It seems like a real risk in this environment it does, critical to their business and then theres a space. One thing thats interesting about box. They did have guidance and we talked about companies not giving guidance and when you have a business you have a somewhat better sense of what your revenues are going to be and its want surprised they give guidance and it was decent and thats a nice move for box i dont own it its too expensive, but good for them breaking news here. New sanctions out of washington and Kayla Tausche has the latest kayla . Melissa, on capitol hill, the house is voting by proxy right now which means essentially that some members can vote on behalf of other members who want to be teleworking and they have just secured enough votes to pass a bill that has already been passed in the senate that would put sanctions on chinese officials for Human Rights Violations of muslim minorities that have been encamped in china for several years at this point. This bill would then go to the president s desk once this house vote is final and melissa, it just adds to this ramping up of antichina actions for a variety of issues the president has been presented on policy options for other sanctions on chinese officials related to its National Security law that it is seeking to impose on hong kong to crack down on demonstrations there. So certainly, this is just adding to the myriad of antichina sentiment here in washington, on both sides of the aisle and certainly this is a symbolic move on one hand and potentially could result in retail yagsz by china. Melissa is this the announcement that President Trump teased the other day when he said the response to the security law would be announced by the end of the week sore is this separate . No. This is separate this is an action that lawmakers on capitol hill are taking specifically to hit china for these human rights abuses. What the president is planning to announce if he makes the decision to do so, would specifically target beijing in response to that hong kong National Security law that it was thought to impose earlier today. The secretary of state mike pompeo certified to congress that hong kong has not hong kong has lost its authority and it is no longer a onecountry, two systems type special territory. That could have ramifications for special treatment specific with the absence of tariffs in hong kong. It could result in new action by the administration by the end of this week. Kayla tausche, keeping on top of this for us guy adami and you had specifically raised one in a series of actions we dont know the extent quite yet, so we dont know that yet, and here we are, guy. Out of all of the things that give me concern and have given me pause this has been the top of the list, yet, when i first started talking about this, the