Transcripts For CNBC Fast Money Halftime Report 20240712 : v

Outperformer, up 0. 6 of 1 small caps pulling back. Our Investment Committee today, joe terranova, stephanie link, jon najarian joe, lets get your top line read of the markets right here we had an 8 pullback into mondays open. Weve rebounded a little more than half of that over three days, so was that it for the nearterm pullback or are we still in a choppy phase . Well, we still have more fight to encloses the gap from last wednesday into thursdays decline for the s p, mike. That gap sits at 3153 to 3181. The composition of todays tape shows weakness in what had been kind of those dashfortrash leaders. If i look at the dow, i see exxon, boeing and chevron. They are underperforming today within the s p you have the cruise ships underperforming and then for the nasdaq, its the airlines and marriott. So the strength has to come from the old place, your Mega Cap Technology oriented names. Theyre going to have to carry the momentum to close the gap further. On the other side of chairman powells testimony well get some more insight towards that and see if this sea of liquidity continues to drive asset prices higher. Steph, obviously theres been a lot of daytoday swings in that cyclical versus growth value kind of orientation, that interplay. I know which side of it you tend to prefer to play, but are we now back in a market where its going to be kind of high liquidity, low growth . That means the old Growth Leaders will be the ones to take us well, you know, mike, ive been talking about a bar bell forever since the march lows you do want some exposure to growth and some exposure to secular growth, technology in particular but i think that you do also want to own some of these cyclicals. The reason is because im looking around the world, not only in the u. S. But around the world. Data points are actually Getting Better here in the states weve gotten really good housing data over the last couple of weeks why i focus on housing is because as you know its a leading Economic Indicator and theres a Multiplier Effect to it as well yesterday we talked about Mortgage Applications being up 71 from the april lows. We had the nahb housing index also up 21 points month over month, so those are very encouraging. Today we got permits up 14. 4 . Thats going to help june Housing Starts so thats very encouraging. Then i look at the eurozone and the auto sales in may, up 3. 2 Million Units on a sar basis, thats encouraging in china, air pollution and coal consumption, those numbers are going higher which shows that youre seeing better activity. So the economy is definitely recovering you want to own stocks that have exposure to that but certainly you also want exposure to secular growth at the same time. The fact that you added exposure to u. P. S. , thats a name that got a bullish call today, a catalyst call out of Deutsche Bank basically saying going to beat the number on this quarter. Is that the play i hope so i hope they beat the number. I started buying it when amazon said they were getting maxed out in terms of capacity and i thought u. P. S. Certainly could benefit. But i do also think this is a workfromhome theme, b to c for sure we have to get b to b back for margins to escalate higher and thats why its a workfromhome kind of a name. Jon, in your zone, the market as a whole has not fully relaxed, even after rebounding here the vix still in the mid30s yet at the same time tremendous amount of volumes, probably from retail traders in the Options Market speculating on some of these fastmoving names. How do you reconcile those things you have the market on guard and professionals a little bit defensive and yet you still have a lot of aggressive plays going on in the Options Market sure, mike. A lot of aggressive plays. I mean its been across the board. Ive got some unusual for you later, and the volumes there are three or four times normal volumes in these particular stocks that ill highlight but im really focused in on, mike, some of the areas where that fast speculative money isnt flowing in as much, but these stocks are moving. To stephs point, housing obviously is a big deal because of the employment implication as well as the fact that lowes and home depot, im trading a lot of lowes today im trading a lot of logistics players like xpo, mike, and a lot of the truckers like chrw, landstar, a whole bunch of these that are moving things around the country right now. Ive seen a lot of institutional paper in those names, mike so im not dismissing your idea that there is a lot of speculative paper in the options, and i think thats one of the reasons that weve seen volumes up so much in the options contract 42 million, i think, last week and again this week, very high numbers. But also a lot of these traders are smaller trades those ones that are under ten lots, for instance but the ones that are over 100, over 500 and over 1,000, those are out there as well. Some of them are, like you say, protecting, mike, and others are out there absolutely getting more exposure. Netflix up huge in the last four days and that stock moving from the 400s to 450 and a lot of speculative paper in those options in particular, the weekly options. Joe, people continue to observe this market and kind of marvel at the fact that it continues to be able to shrug off what a lot of people are focusing on in terms of increasing infection rates in some parts of the country. The past two days you had a headline, yesterday was about beijing cases. Today was about texas hospitalizations very brief pullbacks in the overall market and then kind of the market reasserted itself a little bit do you think theres some threshold where the market will Pay Attention or is nothing really interrupting the overall reopening theme just yet for the market to care about liquidity, mike unprecedented. Its just to think what we have done in terms of growing the Balance Sheet and the impact and the continued communication from chairman powell that he will do whatever he needs to do to continue the recovery, it is about the liquidity. I do think its fair to give consideration to where we are right now to stephs comments on cyclicals. S p sitting right now at 3125, i want to make sure ive got what i would define as a quality cyclical for myself. Thats a nike, thats a disney, thats a home depot that jon mentioned. In the Financial Sector thats a blackstone if its not a qualitative cyclical, if i can find 8 in the high yield market, i think thats a better risk reward scenario i think if weve learned anything in the last week, it is about that bifurcation in the cyclicality between a Quality Company and a company thats not so qualitative. Steph, what are your assumptions right now in terms of how much the market is willing to write off this quarters numbers, next quarters numbers . The higher the s p goes, you would think the stakes have to go up as well in terms of when and how well companies will deliver. Yeah, ive written off 2020 for sure i think actually 2021 is going to be very challenging its probably going to be more back half weighted so what ive been trying to do is look 2021 and 2022 and normalize the numbers that way to get to a valuation that im comfortable with and very much to joes point on cyclicals, i think every single one of the cyclical names that i own is very high quality with very strong Balance Sheets and the dividends are well covered so thats how ive been positioning myself on the cyclicality trade. But i think whats interesting, mike, i dont know if youve seen this, but the last couple of weeks the top down strategist for the s p 500 looking at 2021, those numbers are starting to rebound a little bit they have been coming down a ton over the last couple of months, i get that, but they are actually starting to reverse and i think thats what i talked about earlier, that in the states its starting to improve so we can model a little more accurately but not with a lot of confidence at this point, unfortunately. Jon, i guess as we wait for chair powell to start his house testimony, the question is what more he might be able to say that investors are really going to be open to hearing, meaning hes been reiterating the point hes focused on Risk Management and the Downside Potential for the economy and, therefore, is effectively all in what incrementally do you think he might be able to tell us . Well, i think, mike, they might be asking him more questions about for instance, tomorrows jobless claims, were hearing that its going to be somewhere between a million and perhaps 2. 2 million claims in that and the continuing claims are going to be very important as a reading Going Forward in all of these but, mike, i think some of them might be asking him questions about exactly how long, because hes said yesterday in his testimony accurately that that extra 600 runs out the end of july that 600 per week that enhances the Unemployment Benefits per state. I think that might get a lot more play with the house than it did with the senate yesterday. And yet a lot of them should be looking in the mirror when theyre talking about this because thats them. Thats not him thats not chair powell and the fed, thats them and so he said to the senate, look, a lot of this has to come from you folks, and i think hell say a lot of the same when hes asked these questions today. Hell probably say we need it, because thats what he said yesterday, mike, so im anticipating that hell say the economy needs it, the american folks that are part of that 44 million unemployed need it badly, and then hell encourage them to get to work on it immediately. So thats more or less what im anticipating, mike. Yes, its pretty much a lock hell get as close to that line of telling congress its congress job as he did yesterday. Meantime apple hitting a new alltime high today, getting another price target increase at rbc, raising the price target to 390 from 345 all of you own it right here obviously its been pretty much immune to any concerns about china iphone demand. Joe, field positionwise apple right here, how do you treat it . Staying with it i think some of the research that ive done in the last week regarding esg investing, i really didnt realize, mike, how Inclusive Technology and Mega Cap Technology was in the holdings of all these esg etfs theyre popularized, whether its an apple or a microsoft or a visa theyre popularized as all the top holdings i think theres this added element to where the experience right now of covid19, were actually putting into practice the stakeholder first, not the shareholder, and i think not only does apple check the box in terms of its visibility to a very fast earnings growth, check the box in terms of its quality as measured by Free Cash Flow and its significantly low debt level, but now you also have this new dynamic where it cuts as that very strong slice of what we define as esg. We thought of esg previously as all about environmental and that took you to industrials and energy but now theres a focus on social, theres a focus on governance and thats a new added element to apple and just another reason to continue to own it. Yeah, in fact i think in past years esg, its relative performance was also credited to the fact that it didnt have a big sector bet in tech steph, do you get nervous at all going down the list of things joe said, in other words, theres so many rationales for owning apple that it seems youre kind of maxed out on why youd have an interest right here analysts because the price has gone beyond the consensus target have come up with reasons to raise their target because otherwise youve got to downgrade the stock. New york cio, i think it is. I think this actually is a workfromhome beneficiary as well or a recovery story as you see smartphone demand go from down negative double digits to kind of say flattish by the beginning of next year then youve got 5g as the catalyst as well you can make the case that their Old School Business if you will should see a reacceleration in addition to services and wear als and that sort of thing this is not one i would be adding to. I certainly wouldnt want to sell it before the 5g cycle but i think you need to check the boxes in terms of whether you feel comfortable on that forward multiple. Jon, wouldnt really seem to qualify you talked about the truckers before and a lot theofz these names that are not at the ep cent epicenter like cruise lines but is apple in that zone, still have a little juice in them here i think stephanie and joe did a great job explaining so many of those reasons that all three of us own the stock. As far as cyclicality calculator, i love that new nickname, i think were going to see a lot more of course were going to see 5g, 5g, 5g. But those new phones, we will start seeing the leaked pictures of those a little more than a month from now, michael. As we see those, i think a lot of this cash there was pentup demand clearly about the auto sales well, there is pentup demand for new tech not just the tech for your children and your significant other to work from home, which weve seen that pour into best buy, apple, dell computers, all of these names but i think theres that pentup demand for something new and shiny. That new, shiny thing will be that 5g iphone, i guarantee it its why its my Biggest Holding right now. Somebody had a report saying three months up to a new iphone launch apple has tended to outperform the s p by ten percentage points. Were in that window right now amazon meantime initiated a buy at needham an analyst said there are hidden value multipliers that suggest the stock is worth between f r 4,500 and 5,000 a share. Everyone loves it for all the reasons we know but just how high can the stock go in the near term . Especially with 90 of the sell side having buy ratings on this stock so you have that you have the fact that theyre spending an incremental 4 billion on cost, cap ex and op ex and that kind of thing. I dont think youre going to see the operating leverage on the bottom line as a result of this heavy spendsing and i dont think youre going to see a lot of margin upside so its up 41 , 42 on the year. When it was up 32 , 33 on the year i felt pretty good about it i still own a little bit of it because again its one of those secular growers we were talking about. But it could take a breather here in the near term, especially if you see this continued rotation and more cyclical names and go back to work kind of names. One of the lines in that needham report is that the Media Business could have a tremendous amount of embedded value i dont know if the market gives credit for that obscure asset inside a company nobody knows how much youd pay on the open market for Something Like that, but is it persuasive to you yeah, i think to stephs point, when 90 of the Analysts Covering it have that buy rating, they try to find as many potential reasons that the others maybe have not identified so i dont know if thats the reason why youre seeing the continued appreciation for it. I like stephanie just because of my significant nasdaq exposure i moved out of amazon. I have too much in terms of risk, whether its the culmination of having previously amazon and apple and microsoft and, michael, to that point, i just dont think of all the boxes that microsoft checks, theres this kind of a lack of respect and visibility paid towards microsoft relative to the other Mega Cap Technology names. But i think clearly this is the preeminent Mega Cap Technology that you want in your portfolio. Yeah, no doubt about that, microsoft has a lot of a lot of love for multiple reasons as well we are going to go to see jay powells testimony as soon as it does begin, as soon as the q a begins down in washington. Meanwhile, a quick note on the airlines another buy rating from c port global jetblue, southwest jon, is it time here the xal is down almost 3 today. Yeah, i think when you do get like as soon as we saw that last night, mike, the norwegian cruise lines news that they were putting off some of their sailings until september, i think it was, michael, which was longer than some folks had hoped, you saw a reaction, you know, reverberate throughout the travel sector because anything, whether its texas hospitalizations, whether it is softness in these travel stocks or the hoteliers, all of those are bad news and usually get a very quick reaction. We got that, so i think you can start nibbling again on some of these names. Weve seen a lot of folks that have shied away from the airlines or exited completely, like mr. Buffett, but i think you can trade ranges in these and i would do just that, michael, on a significant dip like the kind that we saw last week and were seeing a little bit of that again today in this sector i think you add to these names but then you trade out of them, michael, as they move back up to those upper resistance areas because, again, were not going to really see Significant Movement in the area until, as i say, september, october, november so right now its just betting on what might be out there for them yeah, steph, youve got to make bets on the cash burn, exactly what percentage of people are going to feel comfortable to fly in a couple of quarters, what the pricing situation looks on the back end. Is there any ripe in this group that you would approach . No, not even southwest, which i view as the very best of the lot. Im more of an investor. As you know, mike, we talked about boeing forever now and ive owned boeing for a while. It is down 40 so it still smarts every time i look at the name but i think that the bond deal that they did i think was a very, very good sign it was two times oversubscribed and that suggests that people believe in the longterm duopoly that they have with airbus so you have that then the restart of the 737 max. And that to me is positive we have to get recertification, i get that its going to come in the next couple of months, and then your questioning on boeing is then what can they generate Investment Committee<\/a> today, joe terranova, stephanie link, jon najarian joe, lets get your top line read of the markets right here we had an 8 pullback into mondays open. Weve rebounded a little more than half of that over three days, so was that it for the nearterm pullback or are we still in a choppy phase . Well, we still have more fight to encloses the gap from last wednesday into thursdays decline for the s p, mike. That gap sits at 3153 to 3181. The composition of todays tape shows weakness in what had been kind of those dashfortrash leaders. If i look at the dow, i see exxon, boeing and chevron. They are underperforming today within the s p you have the cruise ships underperforming and then for the nasdaq, its the airlines and marriott. So the strength has to come from the old place, your Mega Cap Technology<\/a> oriented names. Theyre going to have to carry the momentum to close the gap further. On the other side of chairman powells testimony well get some more insight towards that and see if this sea of liquidity continues to drive asset prices higher. Steph, obviously theres been a lot of daytoday swings in that cyclical versus growth value kind of orientation, that interplay. I know which side of it you tend to prefer to play, but are we now back in a market where its going to be kind of high liquidity, low growth . That means the old Growth Leaders<\/a> will be the ones to take us well, you know, mike, ive been talking about a bar bell forever since the march lows you do want some exposure to growth and some exposure to secular growth, technology in particular but i think that you do also want to own some of these cyclicals. The reason is because im looking around the world, not only in the u. S. But around the world. Data points are actually Getting Better<\/a> here in the states weve gotten really good housing data over the last couple of weeks why i focus on housing is because as you know its a leading Economic Indicator<\/a> and theres a Multiplier Effect<\/a> to it as well yesterday we talked about Mortgage Applications<\/a> being up 71 from the april lows. We had the nahb housing index also up 21 points month over month, so those are very encouraging. Today we got permits up 14. 4 . Thats going to help june Housing Starts<\/a> so thats very encouraging. Then i look at the eurozone and the auto sales in may, up 3. 2 Million Units<\/a> on a sar basis, thats encouraging in china, air pollution and coal consumption, those numbers are going higher which shows that youre seeing better activity. So the economy is definitely recovering you want to own stocks that have exposure to that but certainly you also want exposure to secular growth at the same time. The fact that you added exposure to u. P. S. , thats a name that got a bullish call today, a catalyst call out of Deutsche Bank<\/a> basically saying going to beat the number on this quarter. Is that the play i hope so i hope they beat the number. I started buying it when amazon said they were getting maxed out in terms of capacity and i thought u. P. S. Certainly could benefit. But i do also think this is a workfromhome theme, b to c for sure we have to get b to b back for margins to escalate higher and thats why its a workfromhome kind of a name. Jon, in your zone, the market as a whole has not fully relaxed, even after rebounding here the vix still in the mid30s yet at the same time tremendous amount of volumes, probably from retail traders in the Options Market<\/a> speculating on some of these fastmoving names. How do you reconcile those things you have the market on guard and professionals a little bit defensive and yet you still have a lot of aggressive plays going on in the Options Market<\/a> sure, mike. A lot of aggressive plays. I mean its been across the board. Ive got some unusual for you later, and the volumes there are three or four times normal volumes in these particular stocks that ill highlight but im really focused in on, mike, some of the areas where that fast speculative money isnt flowing in as much, but these stocks are moving. To stephs point, housing obviously is a big deal because of the employment implication as well as the fact that lowes and home depot, im trading a lot of lowes today im trading a lot of logistics players like xpo, mike, and a lot of the truckers like chrw, landstar, a whole bunch of these that are moving things around the country right now. Ive seen a lot of institutional paper in those names, mike so im not dismissing your idea that there is a lot of speculative paper in the options, and i think thats one of the reasons that weve seen volumes up so much in the options contract 42 million, i think, last week and again this week, very high numbers. But also a lot of these traders are smaller trades those ones that are under ten lots, for instance but the ones that are over 100, over 500 and over 1,000, those are out there as well. Some of them are, like you say, protecting, mike, and others are out there absolutely getting more exposure. Netflix up huge in the last four days and that stock moving from the 400s to 450 and a lot of speculative paper in those options in particular, the weekly options. Joe, people continue to observe this market and kind of marvel at the fact that it continues to be able to shrug off what a lot of people are focusing on in terms of increasing infection rates in some parts of the country. The past two days you had a headline, yesterday was about beijing cases. Today was about texas hospitalizations very brief pullbacks in the overall market and then kind of the market reasserted itself a little bit do you think theres some threshold where the market will Pay Attention<\/a> or is nothing really interrupting the overall reopening theme just yet for the market to care about liquidity, mike unprecedented. Its just to think what we have done in terms of growing the Balance Sheet<\/a> and the impact and the continued communication from chairman powell that he will do whatever he needs to do to continue the recovery, it is about the liquidity. I do think its fair to give consideration to where we are right now to stephs comments on cyclicals. S p sitting right now at 3125, i want to make sure ive got what i would define as a quality cyclical for myself. Thats a nike, thats a disney, thats a home depot that jon mentioned. In the Financial Sector<\/a> thats a blackstone if its not a qualitative cyclical, if i can find 8 in the high yield market, i think thats a better risk reward scenario i think if weve learned anything in the last week, it is about that bifurcation in the cyclicality between a Quality Company<\/a> and a company thats not so qualitative. Steph, what are your assumptions right now in terms of how much the market is willing to write off this quarters numbers, next quarters numbers . The higher the s p goes, you would think the stakes have to go up as well in terms of when and how well companies will deliver. Yeah, ive written off 2020 for sure i think actually 2021 is going to be very challenging its probably going to be more back half weighted so what ive been trying to do is look 2021 and 2022 and normalize the numbers that way to get to a valuation that im comfortable with and very much to joes point on cyclicals, i think every single one of the cyclical names that i own is very high quality with very strong Balance Sheet<\/a>s and the dividends are well covered so thats how ive been positioning myself on the cyclicality trade. But i think whats interesting, mike, i dont know if youve seen this, but the last couple of weeks the top down strategist for the s p 500 looking at 2021, those numbers are starting to rebound a little bit they have been coming down a ton over the last couple of months, i get that, but they are actually starting to reverse and i think thats what i talked about earlier, that in the states its starting to improve so we can model a little more accurately but not with a lot of confidence at this point, unfortunately. Jon, i guess as we wait for chair powell to start his house testimony, the question is what more he might be able to say that investors are really going to be open to hearing, meaning hes been reiterating the point hes focused on Risk Management<\/a> and the Downside Potential<\/a> for the economy and, therefore, is effectively all in what incrementally do you think he might be able to tell us . Well, i think, mike, they might be asking him more questions about for instance, tomorrows jobless claims, were hearing that its going to be somewhere between a million and perhaps 2. 2 million claims in that and the continuing claims are going to be very important as a reading Going Forward<\/a> in all of these but, mike, i think some of them might be asking him questions about exactly how long, because hes said yesterday in his testimony accurately that that extra 600 runs out the end of july that 600 per week that enhances the Unemployment Benefits<\/a> per state. I think that might get a lot more play with the house than it did with the senate yesterday. And yet a lot of them should be looking in the mirror when theyre talking about this because thats them. Thats not him thats not chair powell and the fed, thats them and so he said to the senate, look, a lot of this has to come from you folks, and i think hell say a lot of the same when hes asked these questions today. Hell probably say we need it, because thats what he said yesterday, mike, so im anticipating that hell say the economy needs it, the american folks that are part of that 44 million unemployed need it badly, and then hell encourage them to get to work on it immediately. So thats more or less what im anticipating, mike. Yes, its pretty much a lock hell get as close to that line of telling congress its congress job as he did yesterday. Meantime apple hitting a new alltime high today, getting another price target increase at rbc, raising the price target to 390 from 345 all of you own it right here obviously its been pretty much immune to any concerns about china iphone demand. Joe, field positionwise apple right here, how do you treat it . Staying with it i think some of the research that ive done in the last week regarding esg investing, i really didnt realize, mike, how Inclusive Technology<\/a> and Mega Cap Technology<\/a> was in the holdings of all these esg etfs theyre popularized, whether its an apple or a microsoft or a visa theyre popularized as all the top holdings i think theres this added element to where the experience right now of covid19, were actually putting into practice the stakeholder first, not the shareholder, and i think not only does apple check the box in terms of its visibility to a very fast earnings growth, check the box in terms of its quality as measured by Free Cash Flow<\/a> and its significantly low debt level, but now you also have this new dynamic where it cuts as that very strong slice of what we define as esg. We thought of esg previously as all about environmental and that took you to industrials and energy but now theres a focus on social, theres a focus on governance and thats a new added element to apple and just another reason to continue to own it. Yeah, in fact i think in past years esg, its relative performance was also credited to the fact that it didnt have a big sector bet in tech steph, do you get nervous at all going down the list of things joe said, in other words, theres so many rationales for owning apple that it seems youre kind of maxed out on why youd have an interest right here analysts because the price has gone beyond the consensus target have come up with reasons to raise their target because otherwise youve got to downgrade the stock. New york cio, i think it is. I think this actually is a workfromhome beneficiary as well or a recovery story as you see smartphone demand go from down negative double digits to kind of say flattish by the beginning of next year then youve got 5g as the catalyst as well you can make the case that their Old School Business<\/a> if you will should see a reacceleration in addition to services and wear als and that sort of thing this is not one i would be adding to. I certainly wouldnt want to sell it before the 5g cycle but i think you need to check the boxes in terms of whether you feel comfortable on that forward multiple. Jon, wouldnt really seem to qualify you talked about the truckers before and a lot theofz these names that are not at the ep cent epicenter like cruise lines but is apple in that zone, still have a little juice in them here i think stephanie and joe did a great job explaining so many of those reasons that all three of us own the stock. As far as cyclicality calculator, i love that new nickname, i think were going to see a lot more of course were going to see 5g, 5g, 5g. But those new phones, we will start seeing the leaked pictures of those a little more than a month from now, michael. As we see those, i think a lot of this cash there was pentup demand clearly about the auto sales well, there is pentup demand for new tech not just the tech for your children and your significant other to work from home, which weve seen that pour into best buy, apple, dell computers, all of these names but i think theres that pentup demand for something new and shiny. That new, shiny thing will be that 5g iphone, i guarantee it its why its my Biggest Holding<\/a> right now. Somebody had a report saying three months up to a new iphone launch apple has tended to outperform the s p by ten percentage points. Were in that window right now amazon meantime initiated a buy at needham an analyst said there are hidden value multipliers that suggest the stock is worth between f r 4,500 and 5,000 a share. Everyone loves it for all the reasons we know but just how high can the stock go in the near term . Especially with 90 of the sell side having buy ratings on this stock so you have that you have the fact that theyre spending an incremental 4 billion on cost, cap ex and op ex and that kind of thing. I dont think youre going to see the operating leverage on the bottom line as a result of this heavy spendsing and i dont think youre going to see a lot of margin upside so its up 41 , 42 on the year. When it was up 32 , 33 on the year i felt pretty good about it i still own a little bit of it because again its one of those secular growers we were talking about. But it could take a breather here in the near term, especially if you see this continued rotation and more cyclical names and go back to work kind of names. One of the lines in that needham report is that the Media Business<\/a> could have a tremendous amount of embedded value i dont know if the market gives credit for that obscure asset inside a company nobody knows how much youd pay on the open market for Something Like<\/a> that, but is it persuasive to you yeah, i think to stephs point, when 90 of the Analysts Covering<\/a> it have that buy rating, they try to find as many potential reasons that the others maybe have not identified so i dont know if thats the reason why youre seeing the continued appreciation for it. I like stephanie just because of my significant nasdaq exposure i moved out of amazon. I have too much in terms of risk, whether its the culmination of having previously amazon and apple and microsoft and, michael, to that point, i just dont think of all the boxes that microsoft checks, theres this kind of a lack of respect and visibility paid towards microsoft relative to the other Mega Cap Technology<\/a> names. But i think clearly this is the preeminent Mega Cap Technology<\/a> that you want in your portfolio. Yeah, no doubt about that, microsoft has a lot of a lot of love for multiple reasons as well we are going to go to see jay powells testimony as soon as it does begin, as soon as the q a begins down in washington. Meanwhile, a quick note on the airlines another buy rating from c port global jetblue, southwest jon, is it time here the xal is down almost 3 today. Yeah, i think when you do get like as soon as we saw that last night, mike, the norwegian cruise lines news that they were putting off some of their sailings until september, i think it was, michael, which was longer than some folks had hoped, you saw a reaction, you know, reverberate throughout the travel sector because anything, whether its texas hospitalizations, whether it is softness in these travel stocks or the hoteliers, all of those are bad news and usually get a very quick reaction. We got that, so i think you can start nibbling again on some of these names. Weve seen a lot of folks that have shied away from the airlines or exited completely, like mr. Buffett, but i think you can trade ranges in these and i would do just that, michael, on a significant dip like the kind that we saw last week and were seeing a little bit of that again today in this sector i think you add to these names but then you trade out of them, michael, as they move back up to those upper resistance areas because, again, were not going to really see Significant Movement<\/a> in the area until, as i say, september, october, november so right now its just betting on what might be out there for them yeah, steph, youve got to make bets on the cash burn, exactly what percentage of people are going to feel comfortable to fly in a couple of quarters, what the pricing situation looks on the back end. Is there any ripe in this group that you would approach . No, not even southwest, which i view as the very best of the lot. Im more of an investor. As you know, mike, we talked about boeing forever now and ive owned boeing for a while. It is down 40 so it still smarts every time i look at the name but i think that the bond deal that they did i think was a very, very good sign it was two times oversubscribed and that suggests that people believe in the longterm duopoly that they have with airbus so you have that then the restart of the 737 max. And that to me is positive we have to get recertification, i get that its going to come in the next couple of months, and then your questioning on boeing is then what can they generate Free Cash Flow<\/a>wise there are very bullish numbers at 18 to 20 a share the next couple of years. I really dont know. I think we have to see the timing of when they get this plane back up and the health of the airlines and whether they can afford these planes but thats the way you want to go if you want to be a longer Term Investor<\/a> on the airlines. Jon, you teased earlier you might have some movers in the Options Market<\/a> see if we can get any of those in right here before jay powell starts taking questions . Lets do it right now michael, this one will blow you away because its facebook so its a stock of course that we talk about every day. But its not every day that you talk about the 260 strike. But those are the calls that theyre buying today, michael. A lot of accumulation, over 8,000, which is 800,000 share equivalent of these september 260 calls being bought very aggressively so im already in facebook i added exposure because of this second one, michael, real quick, net, or cloud flare. Look at this one anything with the name cloud in it does pretty well during covid. And in particular, this name, net, has seen very fast money flowing. We saw 7,000 calls early on, now its over 14,000 calls theyre buying these calls aggressively and i want to be in there. Ill probably be in them anywhere from several weeks to a month, michael. All right an alltime high theyre actually at an alltime high in the clou, thats the dowd computing etf as well that remains really a growth story today, joe, in terms of style performance. I wonder how youre assimilating a couple of things everyone passing around this chart of this huge ramp in Money Market Fund<\/a> assets over the last few months to record absolute levels as if that means theres all this late engt buying power and people are too negative. People poking holes saying maybe its not as big as we thought. Does that actually reflect the tenor of investor positioning and sentiment at the moment, joe . Well, i think in doing and talking to a lot of the wire houses and speaking to Financial Advisers<\/a> around the country, i do think there was some perception that in april you were going to get a retest of the lows and i think a lot of people kind of missed that but they have had the opportunity, mike, to play catchup both on the debt and the equity side, so im not necessarily comfortable with the belief that all this cash sitting on the sidelines is going to flood the market and thats going to be the next catalyst to move us higher the flood of capital, as i stated at the beginning of the show, that is most important and most relevant to which way prices will go is the liquidity from chairman jay powell and the Federal Reserve<\/a>. Thats the cash balance that you most want to Pay Attention<\/a> to because thats where youre going to see the highest degree of momentum. And yet, steph, last week we got a 5 plus down day even with that liquidity backdrop. I mean it seems to keep coming back to the same idea in terms of we all know the inputs of why the market has remained supported as it has, but does it get extended in the short term and do excesses build up to have than wrung out of it here. How do you come down on that after this week weve had . Yeah, i know, because were up 4 in a week as you mentioned. You know, gaining half of what we lost last week. So i think that look, i think at the end of the day we could stall out a little bit if the covid cases continue to accelerate weve come a long way, mike. Were up 40 from the march lows, right . So i wouldnt be surprised quite frankly, i wouldnt really minding. Id love to just see a little bit of a choppy market and just get more information flow. But we do have that liquidity and we do have fiscal policy as well thats probably even more coming, probably a trillion dollars more, well see. How about the infrastructure package that President Trump<\/a> was talking about yesterday . I dont know if thats going to come to fruition but thats certainly something as well. So you just dont want to fight the fed and fight all of these central bankers as well as all the fiscal policies going in place. The u. S. Is now at 44 of gdp, is fiscal and monetary policies combined thats enormous. M2 is up 23 year over year excuse me, year to date, not year over year those are enormous numbers, that is just huge so thats all right but i think that will propel us a little bit higher as we get better economic data. Joe, so many comparisons being drawn mike yeah, go ahead. Yeah, i was just going to respond to that for a second and just talk about the liquidity and understand a rise in covid cases, well, that aligns with the sentiment chairman powell has been communicating to us he seems to have a dour assessment of the economy so he responds with more measures, more liquidity thats important to understand as an investor because you dont want to negatively react to the rise in covid cases. I think the one part that really we havent talked much about is that chairman powell and the Federal Reserve<\/a> cant respond to one thing. And that would be a change in tax policy both for corporate, personal, Capital Gains<\/a> and dividend taxes and if we were to witness that tax policy change because of the november election, the Federal Reserve<\/a> cannot respond to that and i think markets would respond to that accordingly. I do think there becomes a moment where markets begin to price in that potential. I think somewhat we got a glimpse of that last week as an example of what could be coming. But thats a very significant factor that there will be no response to from the fed in terms of liquidity. Certainly no response from the fed, but does it even pay to try and go through the pretzel logic of what the market believes it wants out of an election, whats likely to have in terms of the probabilities for election and what the then policy might be. I mean i think its a lot of steps to go down and 2016 showed it was sometimes a bit of a trap guys, we are actually going down to chair powell as he starts to take questions in the house. You said on april 29th, and i quote, this is a time to use the great fiscal power of the United States<\/a> to do what we can to support the economy, quote unquote. On may 13th, two days before the house passed the heroes act, you reiterated this message saying, quote, additional fiscal support could be costly, but worth it if it helps avoid longterm economic damage and leaves us with a stronger recovery, quote unquote. On sunday, dallas fed president Robert Kaplan<\/a> seemed to echo that same quote. Fiscal policy is going to be critical from here, quote unquote. And yesterday former fed chairs bernanke, yellen and more than 130 economists wrote a letter calling for a bold congressional response, including, and i quote, continued support for the unemployed, new assistance to states and localities and investments in programs that preserve the employer employee relationship, quote unquote. The may jobs report showed slightly better jobs numbers than the april jobs report, which was the worst in recorded history, but theres still major reasons. Black unemployment rose to 16. 8 and 600,000 Public Sector<\/a> jobs were lost, yet this administration and Senate Republicans<\/a> are not moving with any urgency. Republicans seem to be more focused on a more limited response while granting a broad liability shield for major corporations question, do you agree with your predecessors, chair powell should Congress Take<\/a> bold action as soon as possible, quote unquote . Thank you, madam chair. So i would agree that congress has already provided significant fiscal support and that support is now having a positive effect on the economy we see it in Consumer Spending<\/a> and income data, we see it in payrolls, all of that is helping. And i would i would just note that there are Something Like<\/a> 25 Million People<\/a> who are still who have been dislodged from their job either in full or in part due to the pandemic and i would think that it would be a concern if congress were to pull back from the support that its providing too quickly i wouldnt presume to prescribe exactly what you should or should not do, but i would say that it would be wise to look at ways to continue to support both people who are out of work and also smaller businesses that may not have vast resources for a continued period of time not forever, but for a period of time so that we can get through this critical phase. The economy is just now beginning to recover its a critical phase and i think that support would be well placed at this time. Thank you very much on may 15th, more than a month ago now, the house passed the heroes act which would among other things provide 175 billion in rental and homeowner assistance, nearly 1 trillion to support state, territory and local governments and another round of direct stimulus payments for individuals and families i would note many states are reporting an uptick in confirmed cases of new highs, hospitalizations, with some officials slowing their effort to reopen. So who will suffer if the senate does not promptly adopt these measures to support state and local governments, renters, homeowners and the broader economy . Well, as i mentioned, madam chair, i do think it would be appropriate to think about continuing support for people who are newly out of work and for smaller businesses who are struggling to get through what will be a temporary period as the economy moves back up toward higher levels of activity. Thank you very much before moving on for the next question, id like to call on Ranking Member<\/a> mike henry to share with us some information that is very important to this committee. Madam chair, please continue your questions ill take that out of my time. Well, actually while we are here, since the technology is tough, its personal privilege i would seek to inform Committee Members<\/a> about the tragic passing of our colleague and friend, andy boris wife, carol. When andy arrived home, he found that his wife had passed they have two Young Children<\/a> she was 39 years old this is quite a surprise and shock for all of us. But i wanted to ensure the Committee Members<\/a> know this information and please keep andy and his two girls, two young girls in your prayers. Thanks so much and thank you, madam chair. Yield back. Thank you so very much. And now, mr. Mchenry, i will recognize you for five minutes for questions. Well, thank you, madam chair. And look, chairman powell, chairwoman waters, her questions about fiscal policy are certainly, i think, appropriate. We always want the fed chair to endorse our pieces of legislation. That is commensurate with every previous fed chair and certainly with you as well however, monetary and fiscal policy are two very Different Things<\/a> and so i would urge you and the leadership of the fed to stick to Monetary Policy<\/a> now, your words of encouragement, we have our responsibilities on the fiscal side of the house i think are well noted and what youre telling us about the employment marketplace on a goingforward basis i think is informative for ourpolicy making, and so thank you for your statements there, that additional congressional action is required. Now, along those lines we have the main Street Lending<\/a> facility that is to be stood up soon. So walk me through what the intention here is, because this is not something that is over the last 100 years the fed has engaged in the intention here and what is the missing piece that perhaps congress should think about filling in mr. Mchenry, are you asking specifically about main street yes so if the intention of the main Street Lending<\/a> facility. Okay, great for Small Companies<\/a> there was the Paycheck Protection Program<\/a> and for companies that have access to the bond market and are Investment Grade<\/a> rated we have Corporate Credit<\/a> facilities and then theres a large group of very important companies, very diverse, different sectors, different needs, just very different. And those are for them we have the main street facility. And our intention is that if there are credit Worthy Companies<\/a> in that space who are not able to get credit from the Banking System<\/a> because of the pandemic, we want to be there to provide that so thats what weve been working on its significantly different from any other undertaking we have been working on here, particularly because that space is by definition its a space where commercial banks really are the key form of liquidity and of lending and the bank credit agreements are always negotiated so there isnt a really high level of standardization. Each one is a little bit different. So weve got to find a way to get to those borrowers, get through their credit agreements and get them funding were working through the Banking System<\/a> to do that. We have now registered lenders so the facility is effectively open now the lenders are registering and they can begin to make loans were encouraging them to do so and those loans will soon be transferred 95 interest in them will be transferred to the facility so were there and were as i think weve shown, as we go, with all these facilities, we are learning. No one has ever done this exactly and so we have been constantly taking feedback from lenders and borrowers and well keep doing that and thats true for all of our facilities until we feel that weve got the facility that can do the best job. So thats an unconventional set of Monetary Policy<\/a> that youre utilizing given the unconventional nature of this health and, therefore, economic crisis that were facing we also see other banks, japan and europe, trying to control inflation targets using unconventional means, such as yield curve control and negative rates. Do we have empirical evidence to support deploying these tools in the United States<\/a> as you see it . Theres a split id say the evidence is mixed on negative rates there are those who believe negative rates are quite effective and there are those who see the results as somewhat ambiguous. I think here in the United States<\/a>, weve looked at it carefully. We looked at it during the you know, the long expansion that ended in february and chose not to deploy them in the United States<\/a> lately the fomc has looked carefully at negative rates and continues to see pretty broadly across the committee that negative rates are not something that we think is appropriate for the u. S. Economy at least at this time. Its not something that we see ourselves resorting to instead, we look at ourselves using asset purchases and Forward Guidance<\/a> in terms of yield curve control, as you pointed out, its currently being used by a couple of Central Banks<\/a> around the world. Rather than buying assets. What youre doing is saying we wont let the Treasury Curve<\/a> at a certain level move above something. If it starts to move above that level, then well buy treasuries to drive the rate level back down the United States<\/a> actually did that from the late 40s into the early 50s were really just educating on it at this point its not something we have at all decided to do. Thank you i appreciate that you said when the crisis passes we will put them away, these new tools i think that is a very sober assessment, we need to return to normalcy once this crisis is past thank you, madam chair. Chairman powell, again, thank you for being here i started out with my opening comments talking about the situation that we find ourselves in in this country and i believe that this is a moment unlike any other that i have seen in terms of the countrys willingness to finally address these longlasting issues of race and putting them aside i spoke to a group of 5,000 demonstrators and i was almost brought to tears when i stood up to speak because the crowd was probably 65 white the rest maybe brown and africanamerican. We have lost the feed for jay powells q a down at the House Financial Services<\/a> committee during the initial questions he did of course reiterate his focus on the downside risks. Said that maybe congress should consider extending some of those benefits to Small Businesses<\/a> and to consumers that might be lapsing in july. We did not hear much more than that on specifics of policy. Back to the hearing. Or not were still waiting for the zoom hearing or cisco webex hearing to resume for the house. Take a quick check of the markets for you, meanwhile they have been actually pretty placid the s p 500 up a quarter of a percent at 3131. Thats almost exactly 100 points below its high of early last week for this rally. The dow is just about flat russell 2000 has been underperforming but has firmed up in the last half hour or so jay powell once again, by the way, was asked about negative Interest Rates<\/a> and said the jury is out but he doesnt believe they would be of benefit in the United States<\/a> and that while the fed in decades past has exercised control over the yield curve over treasury yields, also did not endorse that idea so going over much the same ground as we as we did yesterday when he spoke to the senate. Meanwhile the 10year yield at 0. 75 of 1 . The yield curve remains with a somewhat steeper shape right now. Well get to some of the sector leaders excuse me, i guess we have the hearing back. To try to, again, to iron out, if you will, some of the wrinkles that have been around way too long, if not even i dont even feel great about even discussing this issue in 2020. So i see a role but im just wondering if you think that the fed can play a role. I do think we have a role you know, i believe that we will do our best to play that role. I wouldnt say its the lead role, but i would say that we are definitely recommitting ourselves to enforcement of fair lending laws, as i mentioned i would also say just as an institution, we want to be we try to make it a very high priority of diversity and inclusion, so we want to set an example for that both internally to some extent my colleagues and i have spoken out publicly on these issues, which i think is appropriate in this unusual moment. And then the last thing and probably the most important we can do is try to get back as quickly as possible to the labor market we had for the last couple of years. Theres nothing like a tight labor market for the lives of low and moderate income communities. We saw things we hadnt seen in 50 years and we want to get back there. Everything were doing with our Monetary Policy<\/a> tools is ultimately designed to get us back to a tight labor market as quickly as we can and then stay there. Thats really the overarching goal of what were doing i appreciate your comments. My questions were not meant to be accusatory. In fact i think that the Federal Reserve<\/a>, i mentioned earlier the comments of mr. Kaplan but even later on this week i will be sitting down with Esther George<\/a> to discuss some of these same issues. Thank you, chairman waters thank you very much ms. Wagner, you are recognized for five minutes thank you, madam chairwoman and i thank you, chairman powell, for coming before this committee today. I wanted to commend you as so many of our colleagues have and the Federal Reserve<\/a> for moving so very swiftly and decisively these past few months on keeping americas economy stable during this pandemic. Just this week the Federal Reserve<\/a> announced it would begin buying up to 250 billion in individual Corporate Bonds<\/a> through the secondary market Corporate Credit<\/a> facility with the ability to also, i believe, tap into 25 billion in funding from the Treasury Department<\/a> that was provided by the c. A. R. E. S. Act i understand the need for the Federal Reserve<\/a> to have this facility at the ready, but id like to know why you decided that it was at this time to launch the facility now, what was the reason for launching this week . Actually this was something weve been saying since we first announced the facility we would do it did happen to be the fact that we ultimately got around to doing it on monday and the overall goal of all of that is to support market functioning. This is the Corporate Credit<\/a> facility and this is the secondary market part of it. So we want to support market functioning because when markets are working, companies can borrow, people can borrow, companies arent feeling tons of Financial Stress<\/a> and are less likely to take costcutting measures and things like that. So i would say a couple things first, buying cash bonds is going to form the primary mode of support over time by which we support market function. Over time well gradually move away from etfs and move more to buying bonds its a better tool for supporting liquidity and market function at the current moment, markets are functioning pretty well, so our purchases will be at the bottom end of the range that we have written down and as those markets continue to normalize, our purchases would decline. Chair powell, are you planning to hold all of these bonds to maturity . Ultimately we are generally a hold to maturity entity. It may be that we sell some back into the secondary market down the road but ultimately were a buy and hold buyer. Chairman powell, as you know on april 22nd, in response to a letter from senator crapo, the Federal Reserve<\/a> vice chair, randall quarrels, requested that congress consider modifying seconds 171 of the doddfrank act, otherwise known to all of us as the collins amendment. Do you agree with vice chair quarrels that congress should revisit the collins amendment to ensure that banks are able to adequately respond to increased credit demands yes so what were looking for in a lot of these things were doing is temporary relief during the pandemic so that the banks can use their Balance Sheet<\/a> to support their household and business customers its no more complicated than that so as they have taken in more deposits and as they have engaged in forbearance on things like credit card balances and things like that, their Balance Sheet<\/a>s grow. So they have been supporting their customers and borrowers and this is simply a matter after louing them to of allo that. So you are in favor of at least a temporary measure to modify section 171, the collins amendment, to allow them to handle these increased credit demands . Yes, and well be happy to work with you on the details of that. That would be terrific. I thank you so much. The Federal Reserve<\/a> has noted that nonbank Financial Institutions<\/a> are currently not considered eligible lenders for any main street loan facility. And in the faq guidance, it states that you may consider expanding the list of eligible lenders in the future. Chairman powell, what is the reasoning for the Federal Reserve<\/a> excluding nonbank and noninsured depository institutions from being eligible lenders under the main Street Lending<\/a> program . Is it not possible to create a lender agreement similar to one that we issued by the department of treasury for nonbank and noninsured depositors institutions depository institutions like we did for the Paycheck Protection Program<\/a> . No, it is possible. It is possible weve been engaged in a sprint here to get these programs set up, and so thats what weve been doing its a little bit i would liken it a little to dunkirk, get in the boats and go, bring the people back. Thats really what weve been doing. So in the case of this, now that weve done that, we can go back and look at various ideas including the one youre talking about. Well, my time has expired, but i hope you do take a careful look at that and that were also able to modify the collins amendment. I thank you, madam chairwoman,. Thank you mr. Perlmutter, you are recognized for five minutes. Thank you, madam chair and chairman powell. Thank you for the hard work you and your staff and the fed have put in very different circumstances, and take a look at your monetary report, if you look at the first four graphs in the report, the last few years youve been here, or chairman yellen, there has been consistent, steady growth since the Obama Administration<\/a> into the trump administration, and now i know the definition of falling off a cliff. Those graphs are very telling in the loss of jobs that weve seen so my first question to you, sir, is in the heroes act, there is a substantial appropriation for state, local and School Districts<\/a> who have seen their tax revenues fall tremendously Colorado State<\/a> government alone is looking at a 300 drop level from last year i know youre not interested in talking about fiscal measures, but if, in fact, we werent to assist state, local and School Districts<\/a> over the next year or two and thousands and thousands of jobs are lost, how is that going to affect the recovery that you hope for . I will agree that i shouldnt i wouldnt offer specific advice on fisca policy i will say, though, from an economic standpoint, state and local governments employ Something Like<\/a> 13 Million People<\/a> states have to balance their budgets, and when revenues go down and expenses go up, what do they do, they cut costs. Weve seen state and local governments lay off a million and a half people. State governments provide essential services, as we all know, so theyre a very large employer, and its i would say its certainly worth considering all of that. It will hold back the economic recovery if they continue to lay people off and if they continue to cut essential services, and, in fact, thats kind of what happen happened i thank you for that. I guess im going to summarize your answer laying off a lot of people will not help the recovery and i saw today, even a substantial company like at t announced its laying off thousands of people as part of a restructuring or something, i didnt read the entire article but i have, in a report on the second page, it says the strains on household and business Balance Sheet<\/a>s from the economic and financial shocks since march will likely create persistent fragilities. What did you mean, or whoever wrote the report, what did you mean by persistent fragilities this is what we mean by that. Something like 25 Million People<\/a> have been displaced in the work force overall, either fully or partially. And those people are right now theyre getting enhanced unemployment insurance, perhaps. Many of themmay have gotten support checks as part of the cares act, but over time they dont have a secure income flow. And to the extent they lose those benefits that theyre getting, theyre going to come under financial pressure right away most low and middle income households dont have substantial assets to fall back on same thing with Small Businesses<\/a> they dont tend to have substantial quantities of financial cushion to fall back on thats what our surveys show, both for households and businesses so theyll be under strain, and of course the prospect of facing that kind of strain is already strenuous and causes people to pull in their spending, and those are the kind of things that become selfreinforcing for the economy. So you put together 11 different facilities from Corporate Bond<\/a> purchases, municipal and all those kinds of things is there anything that you would like to do from a monetary position of the fed that the treasury or the administration has prevented you from doing the answer is no. You know, we have very specific powers which are lending powers, in addition to our regular Monetary Policy<\/a> powers we have lending powers that weve used to a completely unprecedented extent here, and i think weve been broadly able to do the things we felt were most in need of doing of course, the powers that are going to matter so much Going Forward<\/a> that have already mattered are really the spending, the tax in spending. I appreciate your testimony, sir, and i yield back to the chair. Thank you mr. Rose, you are recognized for five minutes mr. Rose is not present. Then well go on to mr. Stile. You are recognized for five minutes. Hello can you hear me . This is mr. Stile yes, can you hear me . Yes okay. I was talking, chairwoman. If i can begin yes, you may begin. Thank you, chairwoman waters and recognizing member mchenry for being here today as we move through this, i am very op encouraged by the resul. We have a long way to go, but i am encouraged and i credit the administration led by mr. Trump and your group to so quickly help revive the economy. However, i received news yesterday that makes me a little less encouraged and more concerned. I received a call from a bank here in tennessees sixth Congressional District<\/a> yesterday alerting me to the fact that they had been notified at the beginning of this week by the fed that they would only be receiving a small portion of their weekly order of coinage. According to this banker, his institution will likely run out of coins by friday of this week or this weekend, and after some preliminary research,i found that many other banks across my district are having the same operational challenge. My fear is that customers who use these banks will react very poorly and i know that we all dont want to wake up to headlines in the near future such as banks out of money chairman powell, i wonder rk, a you aware of this issue, and what is being done to mitigate it thank you yes, i am aware of it, im very much aware of it let me say whats happened is that with the partial closure of the economy, the flow of coins through the economy has gotten its kind of stopped the places where you go to give your coins and get cash, folding money, those have not been working, stores have been closed up the flow of money has kind of stopped. Were aware of this. Were working with the mint and were working with reserve banks. As the economy reopens, were seeing coins move around again if the bank hasnt done so, they should be in touch with their reserve bank to help this situation. Weve been working on this problem. I very much appreciate you bringing it to our attention we feel like were making progress, but its been something that weve been working on chairwoman waters, i would like to submit for the record this release from the fed, strategic allocation of coin inventories. Without objection, such is the order. Chairman powell, i wonder, and to some degree youve already spoken to this, but is this indicative of a larger issue, and is it temporary or does this point to a larger structural issue on this particular matter . We believe its just temporary. Its due to the fact of the economy being in significant part close, as i mentioned, and the flow of coins through the economy. The reserve banks and the banks think about it all the time, but now were beginning to see those shortages. Weve been aware of it were working with the mint to increase supply, and were working with the reserve banks to get that supply where it needs to be. We think its a temporary situation. And if you would, i guess the banks that im talking with, like the one that i mentioned in my district, what would you suggest they do to deal with this issue im thinking particularly not only about the banks but their customers, businesses and the consumer who is going to be faced, all of these institutions and individuals are going to be faced with the prospect of having to round up or round down and in a time when pennies are the difference between profitability and loss, it seems like it might be a bigger concern than the announcement from the fed would indicate that it is. So i would encourage your banks to get in touch with their reserve bank i dont know whether youre atlanta or st. Louis, but which it may be both in your district, i dont know but in any case, theyre responsible for this, and were working on it. 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