With so many investors now jammed into the same stocks, could this be part of a bigger shift. Your Investment Committee to help you knanavigate through alo this all right. Before we get to everybodys thoughts and insights and ideas, lets get a check on this market at this hour as you can see kind of like this time yesterday, we have the dow higher the dow is up 400 yesterday before sliding toward tend of the session. Were up 300 points today. Basically getting back to exactly where we were at this time 24 hours. The s p is up slightly the russell, the small cap up. Look at the nasdaq, only one of the four in the red here kate moore, you are big picture, macro thematic youve seen this befor especially on a tuesday seems to be bad for technology. Either way, do you believe that this is the beginning of this rotation that everybody kind of keeps hinting at about out of technology taking the profits, into other things or a one day thing because its got to happen some time . I think we can all agree that technology is incredibly well loved and well owned sector. Any time you have this much sort of aggressive positioning in one sector it will be prone to these short term reversals one of the big debates in the market is between growth and value. Whether the technology and Growth Stocks really are going to have to see leadership to value and more cyclicals in my view, thats not going to happen in the near term. We may get the short rotations but in order for a sustained value or cyclical leadership, were going to need to have a much better growth environment and we still are battling reopenings and return to Economic Activity and return to normal and until we can have a significant and sustained acceleration in the economic picture, i have to say i think growth and some of these Technology Companies are going to be the ones putting up the better revenue numbers for the foreseeable quarters josh brown, we hear the word normal a lot normalization, return to normalcy what is normal look like to you and your team when it comes to the economy, to work what do you see in that term i think people are dreaming stock mashlgtrket away from technology now were starting to see this level off in Consumer Confidence were starting to see some of that acceleratiexhilaration stae out. Its happen ng ting in the data. Its happening in different stock sectors. I think youll only have to pick out these two quotes from the two largest banks in america to truly understand whats about to hits the stock market and sentiment. The first one, i picked out, this is from the cfo of jpmorgan they did a good job, which im sure we will address id say in First Quarter we were looking at a deep but short lived downturn we were focusing on the most impacted sector. Now were looking at a protracted downturn and reserved for a much more broad base now its not for the large banks. Theyre saying its every one. Thats why you saw them take another 9 billion and push it into their reserves against future losses. A lot of that is the consumer but also commercial real estate and et cetera. Wells fargo ceo, there remains great uncertainty but our economic assumptions have changed significantly since last quarter. They are already saying from last quarter to now, things have deteriorated thats kwhawhats happening in economy. Los angeles told you schools arent going to reopen in the fall thats an economic daisaster. San diego telling you the sameg saying it in texas people cant go back t it home,n school i very much feel all the lights are now flashing yellow. Wake up. Dthere was a guest on squawk alley that said if my workers kids dont go to school, they cant come to work because its not like they have child care handy. It will be an economic tough situation. Stephanie, it was a bank of america fund manager survey. It has a lot to do with technology stocks. Lets forget that for a second i thought it got less attention but maybe more important to joshs point is only 14 of the Fund Managers surveyed by bank of america said they now expect a v shaped recovery. What do you think . I think up until now you have seen a v shape recovery in you look at housing and the pmis and the new orders within the pmis one of the comments that jamie dimond made is autos were at all time records there are consumers spending and buying the question is what does the reopenings and then the closures, does that cut off the momentum that we have been seeing i think it probably does lets listen to what the company vs to say. I was a little alarmed about what the delta ceo said about what he said in terms of demand at the end of the quarter. I think the airlines are in a worltd world of hurt. Well get more stimulus coming m2 is up 25 year over year. You do not fight that. Risk assets out perform when you have this kind of liliquidity. I think youll see the markets out perform. The delta comments were not ideal. The reality for the airlines is this, michael. I dont think people are afraid to fly i think its theres nowhere to go were not traveling for work nothing is open. Unless you have driven somewhere and had the fly home maybe from the midwest on sunday or going to visit somebody you really need to see, not a lot of reason to get on that plane right now does that reflect more the consumer or on the state of the airlines to you . Certainly the state of the consumer is going to have an effect on the airlines i mean were still seeing consumers with artificial spending power the unemployed are still getting these 600 a week from the cares act. Looks like that will be extended we have people staying home because they are making more money at home than if they went to work. You got to Pay Attention to the consumer as josh points out, the economy, a lot of the numbers are not in good shape a lot of the jobs arent going to come back quickly if that money ends those consumers dont have the discretionary money to spend consumers are willing to spend, driver the numbers a little bit higher but the key here is, i think, with all due respect, Milton Friedman got one thing wrong opinion inflation isnt always and everywhere a monetary phenomenon unless it creates demand we dont have more demand without a stronger consumer. We dont have it without stronger jobs. This is a long road. I share joshs caution it is a very bizarre economy. We look at the market. Its not my opinion. Look at the stock market today and in recent. You heard stephanie talk about auto sales being near record highs. Auto dealers that we have talked to, on and off air, have reported that. If youre lucky enough to have a job for stable income, you probably saved a lot of money. Youre not going to eat and travel car max, up. Ford up nearly 4 today. The travel stocks are down youre going to treat yourself to the things at home. Maybe a new car maybe a new boat, maybe a new boek if you can afford it. The reality is what were doing is right now is theres stimulus out there thats buying us time. We already got a check market. You can call it a v shape or a check market we had an incredible recovery. We have bought time and what i mean by that is all that stimulus, we are buying time we are buying time for vaccine we could see it almost every single day when theres positive news out there whether its j and j or pfizer, the markets react to that the stocks will respond as well in terms of the travel and leisure, casinos all those types of names that get beat up if we cant find our way out of this whole thing. Theres a lot going on we had an incredible number. Stephanie brings up some great points as well a lot of that will get taken care of if and when we do get these vaccines theres a lot of hope out there. When we get are you taking vaccine the first lets say a vaccine becomes available in minnesota are you first in line to get this unproven, rapidly tested and pushed through the process are you first in line to get this vaccine im probably not the first in line but at some point in time id be in line because it would allow me then to move forward and do things that im not able to do now. My wife has lyme disease her immune system does not give her a very good chance if we were to get coronavirus inside the house. The fact there is something out there, when we get something out there, id be in line. I might not be first because im not in a huge hurry right now. At some point in time, wefr got to get back to some form of normalcy i think they will be a lot of people in line whether they are the athletes, the fans all sorts of people that want to get back to work there are reasons to get back to work even though they might be getting this payment, they can make more money when they get back to work thats what people are looking forward to pete, i agree with you completely its an Economic Disaster to joshs point as well look at the headlines we just had. This is market discussion as well philadelphia may cancel large Public Events through february of 2021. Philadelphia learned the hard way in 1918 with the parade that spread the spanish flu if we see more cities and states, this is no longer bend the curve, we may be shut down for months if not through early 2021 at what point do we acknowledge thats a risk. Visavis, the stock market and buy some protection somewhere. I think you can bring up a lot of different points. You can talk about the big ten football, Ivy League Football and the sports and the reaction of what theyll have to do if things start to go the wrong way for them this is not an easy process. The stimulus has allowed this to be something where people can have time. Were buying time. When we bought this time, take a look at some of the different areas of the market. We will see a will the of these companies that are Big Companies now that nobody even heard of five or six months ago they will become much more like staples Going Forward. We have reached back and told them years forward in terms of where we are we know about technology we know about the semiconductors and how much a lot of that will have to do with how we come out of this. Theres a lot of different levers to pull to get us to the next level we all see it each and every day. We see the zoom calls. We see the team calls. We see all of these Different Things that will become something far more normal even in the future when we do get a vaccine. Two things, pete. Fix your tv. Your face looks like a manet not monet. Showing my knowledge somehow i have a kindergartener. I dont know how that happened but i know zoom learning is not going to work for him. Lets shift gears. The big banks, they are in focus. They are kicking off the big bank results i said results not earnings, stephanie. Wells fargo posting its First Quarterly loss in a decade the three biggies we mentioned, they set aside a stunning 28 billion for loan losses. Are you a owner . Are you a seller or buyer . I do own wells fargo. It was atrocious jpmorgan was great they have a very big operation in that segment of the market which is very opposite of wells fargo. Wells fargo misses on every single thing revenues, expenses, reserve. They cut the dividend. I expected them to cut about 50 . They cut 80 they were forced to by the fed i get that the question is now is it kitchen sinked they took about an 8. 4 billion number did they get more conservative and are they preparing for the future the one thing they did say is theres a ton of costs that have to come out of the company i think they are talking about 10,000 layoffs upcoming. There you go. Theres a lot they can do and so im staying with it youre going to stay with it. The stock is down 51 so far this year. Kate moore, from a broad perspective, the financials, the xlf is up today. We got to differentiate sometimes. Jpmorgan, thats a Trading Company in many ways wells fargo, you get your mortgage and put your money in their banks. There are winners and losers in every sector and industry. The winners from an investment perspective can separate the weak this wasaccelerated over the la four months. If you have the Business Model if management is making the right decisions you are pulling ahead. We see these companies that dont have the software. Number one, is companies talking about the overall cost strategy. I think it will be a big focus and who wins and loses coming out of earnings. The second is going to be around their labor market strategy. What are they doing for the work force . Are they evolving their Business Model . I think a third thing focus on is around capex plans. Where are Companies Pulling back spending michael, kate talking about these job losses you heard wells fargo. Maybe the jobs are gone for a long, long time. Are there any banks that you like or that you own more than others yes there are some that i do like. I like those with more regional businesses im also watching whats going on with the banks. Those banks with earnings are getting a lot of trading earnings they are getting thick earnings. They are getting the transitory earnings that wall street doesnt give as much weighting to the other change at wells fargo was last week might have been the week before, they you have to have a Million Dollars in deposit to get a jumbo loan at wells fargo. Used to be 250,000 that means those loans are getting harder to get and wells fargo is being more cautious in putting money out and lending it you have the fed that wants to get money out in the system and then you have the banks going wait a minute, we have Balance Sheet issues we may have some bad loans coming at us we know youve got our back but we have some concerns here and were going to be more conservative about our lending theres a bit of a friction going on that i think will show up in earnings perspectively josh brown, your take michael nails it. Youll see tighter credit no matter which way you slice it coming from the largest lending institutions and thats a big overnight change over from when the spigets we the Payroll Protection Program is now at the point where a lot of these employers, five million businesses that borrowed money through the program, they have gotten through the forgiveness period already they kept enough employee os on payroll to have the loan forgiven once they get through that and the stores are still closes, restaurants are still closed and revenues muted they say weve got the loan forgiven i cant keep all these people. Thats first starting to happen now. Youll see the effects in the july unemployment report on the first friday in august we know that congress and the president both want to extend the Unemployment Benefits that are special for this crisis. Is it still 600 are they going to let it ride into year end. Last thing is, five million americans have been kicked off their Health Insurance since this crisis began. If you believe the rebound we have seen in Consumer Spending from an ultra ridiculously low level up to where we have seen now is indicative of a strong recovery, you are dreaming we are nowhere near where we were in the consumer economy absent a few categories that we have to put aside. People buying boats and bicyc s bicycles thats great you going to buy another boat next month, another bicycle . I dont think. I would not get overly excited about the bounce off the lows. It was an extraordinary circumstance the comps were great from april into may youre not getting another version of that july into august its just not going to happen. Very by bifercated economy. Now to the airlines and delta shares they are under pressure after posting its lowest Second Quarter revenue since the 1980s. Phil has more on their quarter and their outlook. The outlook is dice si to a certain extent its not going backwardsbut its not growing the way ceo expected it to lets run down some of the numbers when you look at what happened in the Second Quarter a pretext loss of 3. 9 billion expenses related to the covid19 pandemic, 3. 2 billion. Liquidity stands at under 16. 2 they still have a long ways to go this is all about cash. Protecting the Balance Sheet raising as much cash as we can knowing it will be a difficult winter the next 12 to 18 months its important to have a cash reserve. For delta and the airlines reducing the cash burn, while it was a difficult quarter for us in this companys history. 27 million a day thats the cash burn right now thats a big improvement to where it was in march when it was 100 billion a day the goal, getting down to 0 by the end of the year. Take a look at the other Airline Stocks all of them, for the most part, have been under pressure today you look at these passenger levels, they are down 73 . The airlines, well they were hoping to get more of a bounce in july and august that is somewhat muted as we see the passenger levels plateau a bit. Boeing reporting june orders and deliveries once again the monthly orders are not anything spectacular they are downright ugly. Year to date, the orders are negative 784 it may be a while before we start to see the numbers trend positive we have five or six customers who cancelled their orders in the month of june. Thats not surprising given the fact what were seeing of the Global Airline business. I want to get to pete i got to ask you a follow up if you lever a car in a garage for a year oar two and dont run it, things go wrong. Wefr ta is there a bull case maybe for boeing in a sense that if a plane sits idle for a couple of years, maybe you buy a new one because its so expensive to maintain the old one in. Its less about the maintenance. The fact that the max, once its certified and approved, thats far more fuel efficient and more Cost Effective plane than an old 737. While the older one may be paid off or you may a slight lower payment, in terms of running an airline and you want to get maximum efficiency, you want the max. Thats why they see a number of their customers. Southwest hasnt cancelled any of its orders. Who knows how long this will last whether its a year or two. You bought boeing today are you buying into that bull thesis the numbers were awful. We got the deliveries. We g