Backtracking on reopening plans. Wednesday, july 1. This is Worldwide Exchange here on cnbc good morning welcome to july, if you will hard to believe but it is already july 1 time flies it feels like about 100 years. First day of the month, quarter, second half of the year. Dow futures are not giving us many direction the markets are about to give us the best three months in decades and cap off a fourmonth win streak if you are looking for historical comparisons, here is how history shapes out the dow with the best quarterly performance. Nasdaq best quarterly gains. A look at the small caps they dont want to be left behind russell 2000 up 5 best quarterly gain since First Quarter of 1991. Apple soars higher apache led higher by 200 . Congrats to elon musk, tesla leading the nasdaq 100 it more than doubled in three months despite plenty of tesla stock skeptics it crossed over the 2 billion market cape for a bit yesterday. Let us make sure this is all coming in context. The dow coming off the First Six Months in a calendar year since 2008 financial crisis. Horrible first three months with the pandemic and lockdown. Big rebound to start the second half of the year, s p 500 still down 4 in 2020. Around the world, asia kicking off the month. Off to karen tso in london with the news and the trade good morning it has been a patchy start here for the second half. It looks mostly positive looking at the reaction. The foot si was higher at the start and then turned weaker and now gone back up again the stock market is holding on to the green the French Market has been weaker over the course of the trading session. This has been one of the better performers for the quarter german stocks not even starting at all weve had german issues impacting all the german stocks on the exchange. Weve been waiting for the update this is yesterdays print. We are waiting for an update there. We think about the relevance of that stock market. It has been the outperformer here for the last point keeping pace elsewhere, strong trade. 04 and trading up on spanish stocks weve had pmis showing improvements on the flash estimates for june estimated at roughly 47. 4 versus 46. 9 the mixed signal weve got germany contracting. Also airbus. Weve had 15,000 job cuts flagged up here that we are nowhere near the end of the crisis and could get nowhere close to that crisis karen, thank you. Do appreciate that back here at home. The positive rising number of covid19 cases continues to make headlines as more states move to keep the virus from outside. Seema here with the top headlines. That is right, new cases in the u. S. Rising by more than 47,000, the biggest oneday spike since the pandemic began texas reports a new load of more than 6,900 in one day. Governor abbott suspending elective surgery new york governor expanding his states quarantine order to include travelers from eight states including california, idaho, louisiana and nevada. The advertising boycott of facebook continues to Gain Momentum target, pfizer and volkswagen join the list until meaningful action facebook announced it removed a network of accounts associated for the far right organizations. Worth knowing that facebook ceo has agreed to meet with organizers of the ad boycott the senate has agreed to extend the Bailout Program through august 8 giving companies extra time to access the legislation still needs to pass the house for final approval but came hours after mania chin to mnuchin told the committee there was support to extend the Paycheck Protection Program that was due to expire today. Thank you, seema. Now speaking of stocks well get to the market. Closing out the month of june after fed chair jay powell underscored their commitment through the pandemic and lockdown the overriding goal of the various lending programs is to help people who lost their jobs get back to work he does warn a second wave of the virus possesses a major risk i certainly wouldnt forecast that a second outbreak could force governments and people to withdraw again from Economic Activity the worst part of it would be to undermine public confidence, which is what we need to get back to lots of kinds of Economic Activity that involves crowds getting to seema shaw good to see you again. Is there any way to really gauge the risk for the economy and the markets right now . What are you using to gauge any measure of what may happen in the next 12 months hi, brian that is becoming an increasingly difficult question the traditional data we would typically look at is very difficult to follow. Kind of unseen numbers like this are difficult to follow. The thing following through at the moment would be confidence we are seeing the resurgence of cases. We want to make sure it is not for Consumer Behavior. You ask 10 people, youll probably get 10 different answers. As we have said, health data is the new Economic Data what do we do there may be markets that exaggerated their response a lot of the improvement we have seen has been due to pent up demand at some point, that will be associated and so we need to see more there is a real risk that Consumer Behavior will be derailed again we believe in being defensively positioned we Like Technology these are the companies with large Balance Sheets and large cash flow. We generally like being up in quality. Wherever you are looking, you need to make sure these companies have a really strong back drop and can withstand a lot of challenges that they are facing is it worth it to take a flier and add a risk some markets have done great but others, do they look tempting to you . We would still be quite worried. Some of the markets have done well you have to look at some of these places like china, singapore and those. Looking at south america, they are still struggling with policy stimulus we would be more worried about that we are looking more positively than before. Always a pleasure to have you on when we come back, our conversation with Christopher Ailman cio of pension fund first states, now companies are rolling back reopening plans the business of environmental clean up well speak to the company that may be keeping your company safe dow futures turn positive up one point. We are back on a wednesday right after this now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. If youve had the coronavirus, youve got a lot of fight in you. And youre in a special position to help us fight back. The plasma in your blood can literally save lives. But we need to act fast. Please donate plasma now. Please donate. Donate. Donate. Donate now. You fought for your life. Now lets take the fight to covid19. Go to the fight is in us dot org to find out how to donate. Welcome back to Worldwide Exchange. A check on some stocks that are moving this morning starting with fedex revenue fell less than expected. Helped by a 20 increase Online Shopping and Strong Demand from transpacific and charter flight and commercial volume due to stores being closed google delaying the reopening of u. S. Offices to september because of the surge of the rate of cases in may, the company said it would reopen to 10 pes of capacity and scale that up to 30 in september if conditions allowed. A report said boeing did not give regulator documents about the changes. Faa personnel involved in flight tests knew but engineers responsible for certifying the plane did not. The report is a time line of the plane until it was grounded last year back to you. Thank you very Much Technology continuing to reign through the Second Quarter of the market logging a 30 gain since april 1. Leading all of the sectors from july and year to date. The faang stocks were a huge driver the arc surging 61 joining us now is arc Portfolio Manager unbelievable performance what are some of the surprises what are some of the surprising stand outs to you . I think it is really important to distinguish the Technology Sector versus what we are focused on gaining the portfolio. Many of the performance is the faang. We have very little exposure up 42 year to date. We are focused on five platforms expiring an acceleration of adoption most investors have very little skploerz i wrote a piece on how we think innovation deserves a strategic allocation in portfolios you look at Companies Like nvidia and tesla, Everybody Knows those. Youve got Companies Like invite and teledyne who are they and what do you like about them . Yes a lot of them are centered around the gemomic space and centered around the coronavirus right now. Dna sequences is helping us. Envite is one in the diagnostic space that cat pulses into the liquid biopsy space in the detection of cancer. Square is one we own for the cash app up ending banks taking the digital wallet experience and moving away from traditional banking and towards your mobil phone for banking needs. Any planned changes how do you restructure and try to capture some of these companies trying to get attention. Absolutely. We cut across sectors. We are always looking for opportunities. We are very active traders we have a very long time horizon. In the higher volatility markets. There are opportunities where Companies May miss earnings for a penny or two for shortterm returns. They are investing in r d to take advantage of opportunities which we are focused on. That is an opportunity to add exposure to these names. Congratulations on a very big Second Quarter we are watching you. Got our eyes on you. Appreciate it. On deck, closed to america, that is what europe is saying as it closes its borders to a select group of travelers. What Global Market had the best three months it is not us your rbi ahead when Worldwide Exchange returns. We have a developing story out of the European Union which opens its boarders to travelers beginning today. Not on that list, the United States the eu is working to contain the spread of the coronavirus as we face a surging number of cases that is bad news for airlines who make a chunk of their money or used to, on International Routes the former ceo of pan am a mam d and Aloha Airlines when is the next time we can get on a plane in the u. S. And land in europe . I tell you what, if i had a quick answer, it is impossible to figure it out im very upset with some of the actions taken by the eu. China is okay. They are one of the three categories i think theyll all end up in gray china is okay. If you look at the deaths per million. China is at three. Does anybody believe chinas number countries have a right to protect their borders. The question is what methods they use and how they use them and do politics play into them at all, which they usually do. What is your beef with the eu im in ireland at the moment. Ireland is excluded from that list not because we have done well with the covid19 fight, which we did but because we put in this 14day quarantine. Which is nonsense. That is the reason they gave that you cant come in or out of ireland at the moment. As far as the United States is concerned, i honestly dont know when that is going to change can i assure you 0 you are government is in close contact with brussels trying to lobby with that issue. We used to have over 2,000 flights a day over the pond and now there is a couple of hundred. It is impossible to schedule an airline. People dont appreciate the complexity of creating a schedule they want to change this every 14 days . It is an extremely complex Business People dont understand, including the eu, does not understand the complexities of how to run an airline. We had 90,000 americans go through a check point down from over 2 million two days ago, we had 625,000 a giant recovery you remember the days where youd see one guy on a flight. Americans want to fly and get back on planes do you think where cases continue to spread and we back off and those tsa numbers might go back down again . When people walk into a terminal afraid, anxious. Weve added to that tension. As long as airlines require a mask masks. Other prot calls that will be applied over time. And customers will be provided over time. The air filtered through there, better than hospital rooms the challenge is to get that word out there will be trep i hadation it is a problem. Very tough. Go ahead quickly there is no way to sugar coat it it is a tough, tough challenge for the Airline Industry it came out of nowhere as Everybody Knows. David, it is a pleasure. Good luck there in eisland welcome any time still ahead, the exclusive consider the calstrs cio stick around at leaf blowers. You should be mad your neighbor always wants to hang out. 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. But with the covid19 crisis, many veterans are struggling to make ends meet or get the care they need. Dav has helped ill and injured veterans for one hundred years, but today, the need is greater than ever. Give to the dav covid19 relief fund and help provide critical assistance to veterans in need. Go to dav. Org helpvets or call now. Your donation will make a real difference. The markets making most of your money back after massive losses ahead of the decade. Plus new number one issue that could be the deciding factor in the 2020 election. Ahead, bigger than toyota. And how tesla could be bigger than the japanese auto giant wednesday, july 1. This is Worldwide Exchange here on cnbc welcome back and good morning. Im Brian Sullivan it is 5 31 here is how your in investments and money looks right now. They are up 10 points. They are up 10 points in the green after major averages logged their best in decades and capped off a fourmonth win streak best quarterly performance back in 1987. S p 500 up by 20 . Nasdaq best gain since 1999. Up more than 30 the russell 2000 gaining 25 since april 1. Small cap best quarterly gain. In that time, a Little Company you might have heard about called apple carried the dow higher the second gains overall. The dow coming off the worst six months since the 2008 crisis, the s p announcing the worst first half of the year where we have started our conversation with Christopher Ailman at calstrs. We asked what he thinks of the stock market after the wild first half of the year you know, it has been the most challenging first half of the year that i have ever seen the stock market has given us a v yet the real economy seems to be in a sloppy u or w pattern. Expert traders or long termare baffled by traders we are going to be underweight equities but not substantially because that rise in may and june really hurt if you were underweight and caused people to underperform do you believe the robin hooders, the day traders are able to move the market around it is hard to believe but when you think about the millions of advisors, traders and analysts and then on top of that, all the people who like to bet on sports and casinos cant. I know it sounds crazy there is no way i can explain the unusual moves of this market it is not following traditional averages most of the technical patterns are blown out of the water i hear longterm experts who are just baffled by the strength of this market given the economic figures. The fed is probably the only explanation of dont fight the fed and money is cheap it is remarkable how stocks have traded back to neartime highs where things are 2 3s where it was. I dont want to date myself i was doing this job at the nasdaq dak in 1989 not saying there is some chans chance but i do remember the idea if you were trading something and finding someone else to sell it too, you were fine day traders made money on stocks and were probably at zero. How do you think this ends do you think it will be a collapse that well ease our way out of it . I hope there is not a collapse it feels like im out on a length and the ground under us is a little fragile . Im worried about that the way this ends. Well have some kind of a viable vaccine. There are 12 in human trials right now. One of the 12 is going to work and go into mass production. Im hoping by thanksgiving time, we finally turn the corner even then, youve got millions unemployed theyll go back to work slowly people have been financially hurt the 600 a month extra money is going to run out and that puts a huge deficit in the u. S. There is going to be pain to pay for this and by the way, when we get into the fall, there is a giant election it is going to be sloppy im worried it will be a bad voting situation and turn out. For the first time, we may have a strongly not the first time i think well have a really contested election with questions. That will not be good for the equity markets sounds like you are gooding to reduce your equity exposure it sounds like you you are going to keep stock exposure the same or bring it down a little over time in this rough environment, well continue to a invest in real estate ill tell you that is not going slowly well be slightly under weight and defensive. Well stay high on our cash decision because of uncertainty out there. It is too tough of a market to take a big bet away. I recommend everybody to revisit their own retirement accounts. June 3