The fed laid out plans to buy up individual Corporate Bonds this as the emergence of new coronavirus hot spots around the country add to fears of a second wave so why, guy adami, are markets seemingly so immune to these concerns is that actually a good sign for this rally no, its not. But before i have to i would be remiss, melissa, if i didnt wish the b. K. , the bitcoin baller a happy belated birthday. His birthday was yesterday do you know whose birthday is tomorrow i wont keep you in suspense adam smith would have been 297 years old tomorrow why do i mention him i had to read that book the wealth of nations in college. You probably read it as well he was the father of free market capitalism well, what you saw today was the exact antithesis of that and im going to get added by everybody. To think this market is at all free market is a fools folly. The fact that we rallied into this announcement by the fed, which we all saw coming or they announced it prior shouldnt really surprise anybody. I dont think its a good thing. I think its ridiculous. I think the next step is theyre going to announce buying individual securities or stocks at some point. And to think that you can see why people at home get frustrated and say this is a rigged game. You know what . Thats what the fed has effectively told us in my opinion. We left that whole free market stuff at the door back in the financial crisis but what guy is describing sounds like japan. Im not sure that that really is going quite as planned either. Yeah, yeah, right so i mean, yes, agree, free market capitalism died back in 2007, 2008, so here we are, right . We can be upset about it, but this is the market that we have to trade so when we look at what happened today, you have the Federal Reserve coming in. Governor daly out of San Francisco had a speech today that said we cant afford not to so basically we cant afford not to spend more money. We cant afford to buy more bonds, buy more stocks based on that view from that perspective, if you say, okay, fine, there is going to be monetary stimulus, likely fiscal stimulus, to get us through until there is a vaccine, a therapeutic or something, then a second wave is less important to the market its not less important to real people, its just less important to the market and guy is right listen, this market, if you want to buy at all, it will go up dan nathan, please, join the conversation here because i feel like thats the perfect entree for you. Yeah, well, hold on to your chairs here people ill just tell you todays announcement and the reversal and going back to last thursday and the price action we saw, you know, im far less bearish on equities lets say than i was a couple weeks ago ill just tell you this, because the fed has just put a floor in. Theyre going to do whatever it takes to keep risk assets afloat here so the idea of a retest of that march low seems very unlikely unless we have, and this is a bit nuanced here i am equally as bearish on the outlook for our economy the back half of this year, despite the green shoots and things fancy guys in pinstripe suits want to say on the lawn of the white house based on hope. I just dont buy it. Well, im talking here, big guy. So, you know, at this stage of the game, i am less bearish on the equity markets because what the fed is going to do from a monetary standpoint. But on the fiscal side it really seems like were about to have a cliff where this unemployment bonuses run out at the end of july 31st. Politically its going to be very hard to get new assistance to consumers here or to citizens and i think the back half of the year is going to be really hard. To me i think its going to continue to be a really good Trading Market for the traders out there. But listen, i think well be in a protracted bear market i know the s p is down 10 from the highs. I do not see new highs any time soon but at this point i dont see any new lows any time soon either tim yeah. I mean tim, are you with us . Im sorry, yeah my audio is coming in and out. Look, my response to all that is brian talked about the market we have dan talked about a place where maybe hes a little more constructive on equities i think you have a dynamic here where first of all, you did have almost a 10 correction. It happened very quickly much in the way we saw the recovery happen very quickly. I think we have a case where if you look at the city economics surprise index today, it tells you that the empire state, manufacturing came back a lot better than people expected. Were seeing mixed numbers but we are seeing some sense that frankly the consumer is not all that concerned about going back to work. The consumer is not that concerned about the dynamics and the rebound that i think we will eventually get in covid19 cases is something i think the world is getting ready for so back to sentiment for this market, i think this is really part of what the last week to ten days has been all about. The feds announcement today is another extraordinary day for markets. Its not a great day for free markets, but it is an extraordinary day for asset prices and thats why they went higher. Im not sure i would be ready to fight that. This is the ultimate backstop, guy. In every asset class the fed is will to step in and do something. As much as one might be pessimistic about the Economic Outlook in the back half of the year or second wave or whatnot, does it matter if we know the fed is going to be in the market supporting it . I think well, thats an interesting and, again, somewhat nuanced question i absolutely think it matters because i think one of their main goals is to convince people that things are okay and to you know, to sort of ill say it, to pull the wool over the eyes of the consumer to keep them spending. And thats what this total economy is about as long as they see the stock market stable to going higher action one thing weve learned is the consumer will spend money. I think thats the game. What does it mean, though . It means were hiding a lot of the things that are troubling us but this started long before covid in my opinion. This started on, i believe, the exact date was september 17th on the night that the repo market went nuts and the fed has never been able to extricate themselves from it i think thats problematic so can they keep asset prices buoyed yeah i think they have proven they can do that. At what cost is my concern and i know thats somewhat john paul sarth but ill throw it out there anyway. I agree completely with you, but at the end of the day does that really matter ill ask that question again because all of this, whether the stimulus or the feds action is all about providing a bridge to get to the other side. That other side may be the discovery of a vaccine that other side may be just a decline, a severe decline in hospitalizations or, you know, a stemming of the spread here, dan nathan so all of this, if it does work and it gets us to the bridge, isnt that the point and how do you invest in that market right i guess the question is what do you get . What does the bridge get us . It gets us an extra 4 trillion debt weve heaped on this whole thing and thats going to literally be a huge weight on growth Going Forward in my opinion. But i agree, as we get into the back half of the year and there seems to be progress on a vaccine and lets say there are these green shoots showing up, i just dont buy it. I think the vaccine comes later than we think. I think disruptions from other waves come and go and theyre really going to hurt the recovery and i believe unemployment stays double digits when you talk about getting to the other side, equity markets really liked when the 10year treasury yield got off the mat and went from 65 to almost 1 in the last few weeks but its come all the way back i suspect if you see a break of that 55 basis point level which was the closing low back on march 9th, i think that is the thing that will freak out equity markets and thats when investors start pricing in what negative Interest Rates look like here in the u. S. On our main treasury bonds. And so thats the thing that i suspect takes us back to maybe 2,500, 2,600, but again, what happens there . The fed goes ballistic and thats probably your problem so that panic low of 2,200 on march 23rd is probably out of the woods for now. Our next guest, lets bring in mark. Good to speak for you. Hey, great for having me on today. Why question the fed backstop well, its math, right . What the fed has really ended up doing here is devaluing the currency since we started talking back in october of 2018, the equity market is basically flat gold and bitcoin are up about 50 . And gold stocks are up about 80 . So whats happening the nominal value looks like its rising thats what the fed is doing to raise nominal prices but the real value of our assets is declining i get that, but in the short term, mark, are you trading the market that we have, which is a market that seems to want to go up no matter what you throw at it well, it certainly has gone up in the last or went up for four weeks it basically went up from march 23rd to april 23rd and its pretty much been flattish since. Its up 3 or 4 since then and has been very choppy its actually down 10 , down double digits for the year so i think whats interesting is we call it the great separation. In our fund, we are long and short so were about 50 net we have a lot of longs, a lot of shorts and what we try to do is focus on the things that we think still have growth and try to be short the companies that we think are going to struggle in a postcovid world so there are a lot of things that are very, very overvalued that are still great shorts. You know, were up midsingle digits this year with the market down 10 so thats pretty good. What are your highest conviction shorts right now . Were still short a lot of the traditional retail so the amazon road kill. Were also short some of the really overvalued tech and Software Companies i mean there are companies out there selling at 20 and 30 times sales, forget earnings but 20 and 30 times sales so dealing with a little wit of shorts there. And highest conviction longs at this point . On the long side we really like the safe haven trades we love oil services, for example. They got beaten down, so halliburton, slumberge have been beaten down. Gold miners, gold and gold stocks we like cash actually so we have a decent amount of cash. But there are some emerging Tech Companies that look good and will do better in a postlockdown world. And then we still favor a lot of the emerging Market Growth stories. We like china a lot. And the china Tech Companies in particular, like baba and tencent have done really good. Hey, mark, its b. K how are you . B. K. , how are you doing im doing quite well. Question about that china trade, right . They have been extraordinary, emerging markets, china, i understand that economy may be coming back a little bit faster. But it doesnt give you any pause that those companies could be delisted from the u. S. , and would that have an impact on their valuations its a great oint, b. K. Its interesting because weve seen this movie before there are a number of companies that voluntarily delisted to get a better valuation on the Hong Kong Market in shanghai. So i think the threat of delisting is a mistake i think the whole china cold war 2. 0 thing is a mistake i think we should be collaborating, not fighting. But what youll see from investors that are nimble, youll actually get a chance to buy at a cheaper price because these stocks will fall with the threat of delisting, but then when they relist in hong kong, theyll go up a lot because theres a lot of money on the sidelines in china thats looking for a place to invest. Mark, always good to speak with you, thanks. Thanks for having me. Talk to you soon. Mark yusko, morgan creek capital. What do you like dislike about what mark is buying and selling . I like the fact he stands short some of these beatenup retailers because they give you an opportunity to trade around macys is an example of a stock thats gone lower but had significant bounces along the way so i think that makes sense. One of the things he did mention, and i think this is also concerning, and this sort of gets into tims wheelhouse and b. K. To a certain extent as well, is if the fact if the dollar starts to weaken in a measurable way, a lot of people might think that would be bullish for stocks im not so sure. So again, be careful what you wish for, administration, in terms of a weaker u. S. Dollar. You might get it and it might not be how it looks on the back end. Coming up, the founder of Nikola Motors will join us that stock has been red hot. Well get his take on what is driving this big surge. Plus dave portnoy joins us to talk about the explosion in retail activity. Fast money is back in two. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Talk to your financial professional or consultant you say that customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Welcome back to fast money. Lennar was su pouzed to report tomorrow morning but results are out tonight. Lets get to diana olick whos got the details. They probably couldnt wait to get the good news they beat on earnings and revenue using a prudent land strategy and taking advantage of new Technology Already in place. As lennars chairman said at the end of q1 they slowed starts to preserve cash and protect the balance sheet. A lot of the builders have been using the land light strategy during the pandemic but in the q2 report business rebounded significantly in may and by quarters end our total new orders declined by only 10 . We resumed starts and this rebound has continued into the first two weeks of june. Now, another interesting note which we reported quite a bit on is this flight from apartments in urban areas miller added that customers moved from rental apartments and density Populated Areas to purchased homes as record low Interest Rates and inventory levels drove a favorable rebound in the Home Building industry. The average sales price came in a little lower but he said that was due to continuing to shift to lower priced communities and regional product mix due to covid19 stayathome orders now, they reinstated guidance not on revenue or earnings but on home sales, new orders, deliveries and average selling price and margins. Melissa. Diana, what would make it reaffirm guidance for all those things but not profits or revenues you know, it depends on what the pricing comes in theres also the question of was this pentup demand that came in from spring, everything dropped off in march and april and came back suddenly in may and june. You had record low mortgage rates, can that continue into the next quarter will it continue into the fall maybe theyre not sure, maybe they dont know if the economy is going for better or worse and theyre not ready to put that into the numbers yet. Diana olick with lennars results. The stock is down just slightly. Its up about 40 since the march lows, b. K. I dont know where you stand on Home Builders but diana said they may not reinstating or reasserting fullyear guidance because they dont know what the economy will look like in the back half. Right, right. So this is kinds of that uncertainty out there. Why would you put yourself out there if you have this look at whats going on. Anecdotally, what we have heard, what diana talked about is this moving from the cities, from apartments, getting away from dense Living Conditions out into the suburbs. Youve heard it about the tristate area in new york, heard it throughout the country that people are getting out of the city, buying homes outside, and sometimes theyre not necessarily thinking about commuting back in to major cities and so theyre going to stay there for a while. So if that trend continues, and you have kind of the housing, i dont want to say shortage but limited supply that we have at this point in time, that actually could be a really good time oh, and low rates, lets not forget that. Chairman powell told us theres going to be low rates through 2020 add those things up and it looks likes a decent environment for the Home Builders. The fed is not even thinking about thinking about raising rates, plus work from home almost forever, tim. That changes the equation for the housing stocks, although they have bounced strong off the lows. Yeah. If you think about it, last weeks pullback was really nothing compared to the threeweek run wed had in a lot of these Home Builders zero Interest Rates not only gives some consumers confidence to go out and take a chance, even if their job dynamics are a little bit uncertain, but it also gives the lenders a better opportunity to gauge some of their risks. So i do think some of these secular trends and move out of urban areas are still things that are early stage you own a lennar because margins have gotten a lot better these guys have indicated somewhere just north of 20 on the gross margin theyre better on businesses we do know on certain demographics there really is pentup demand so filling that supply need to be the key for the Home Builders. Shares of nikola red hot but can the company keep up its momentum and take on the giant tesla . Later, one sector seeing rk, trgtinodsh tay maetwell tell you what it is fast money is back in two. Is creating Food Insecurity on a scale not seen in decades. An estimated 54 million americans will struggle with hunger. With 200 food banks and 60,000 meal programs, feeding america is the largest hungerrelief organization in the country. Join Morgan Stanley