Ed, welcome back. Thank you very much youve been bullish for a while and now youre acting on it why was now the time i had concerns that the market would have some concerns about the pandemic, that we did obviously see somes increase in the outbreaks down in the sunbelt, but the market the tenyear has been below 1 you know, there is no alternative, probably never been more relevant than it has been since the fed adopted what i call qeforever on march 23rd. You have what you call a meltup in the market, but you say as you have more of this melt up, you increase the risk of a meltdown. How does that factor into your broader view well, you know, its one thing to be bullish, but at the same time you have to be aware of where the down side risks are. To the extent that the market has a melt up, it puts more air between stock prices and earnings in other words, the valuation multiple has been on fire. We had a p. E. Led meltup from 4. 9 on a forward p. E. Basis on march 23rd now were over 22. It looks like were going to go higher led by the big tech growth companies, as you can see today, for example. Its been a nice move back today from those companies what do you make of the debate between dprout and value, and that youre going to need or people think certainly there are those making projections that value will take you to the next level growth has gotten you here, but your scenario suggests that things are snapping back from the virus, that Growth Stocks are going to fall back, and its value that is will take the lead. I dont know if its fall back perhaps on a percentage change basis, you can see the lead for a while. I dont know about energy, i dont know that theres more up side in the price of oil, but the financials probably do have some up side here. Especially if the perception is we are going to get a vaccine sooner or later, and that some of the social distancing features will be a thing of the past 6 to 12 months from now month to day, in 6, financials 5 1 2, those are definitely the leadership groups. Is it just yet another head fake as weve gotten so obvious i dont think well see a recession. Clearly we had a terrible recession in march and april, but theres no precedent for a twomonth recession, but that looks like what it really was. I dont think were going to go back into a downturn i think clearly we are making progress on the health front if that continues, and by the middle of next year this virus pandemic isnt a real issue for the economy, we probably have a lot of catching up to do in terms of pentup demand, in terms of people getting over cabin fever, maybe people going back to the office in some cases. So a lot of good things could come out of this history shows that bad times are followed by good times it is the 2020s, so it could be the roaring 20s again im open to that possibility i think technology is there to create all sorts of opportunities in the decade ahead, compared to the last r r roaring 20s only six points away from a new high on the s p. Jim lebenthal, is he right . Given that the tenyear is up 13 basis points the last few days, should we be worried lets put this into perspective. Your yearend targets is 21 times forward earnings for 2021. In normal circumstances, we would be worried about that. Not in a lowinterest rate environment, but what if Interest Rates keep going up thats a very good question, an important question. Yesterday we had the bond yield jump, and the stock market sold order partly on that development, but i think what the market has figured out is the old adage, dont fight the fed. In other words, the fed has made it clear that theyre not thinking about Interest Rates. Theyre not even thinking about raising Interest Rates thats what fed chairman jay powell has said. That means if the bond yield starts moving closer to 1 , we should anticipate that the fed may actually implement yield curve control. Thats just a fancy shall shall mancy way of saying theyre going to targets the bond yield below 1 that raises the ageold question not really the ageold question that was to be or not to be. I recently wrote a piece comparing hamlets question to mine, which is what should the valuation multiple be in a world where Interest Rates are zero . I dont really have a model that answers that. If rates continue to go up, though, ed, that is also allowing more people to make the case for cyclical stocks, right . Absolutely. Again yesterday we had the financials doing quite well, partly baas the bond yields went up as long as theres a perception were getting out of the this morass, and there would be restructuring that the banks can absorb it, and can actually profit coming out of it. Steve weiss, what do you think . Hey, ed ive got a question for you. I read your note i enjoyed it at one point you say that all the good news is discounted or largely discounted in for this year and next year. With that being the case, why would you raise your price targets if all the good news is in there already its about a 12 increase. I think theres more good news that can move it you know as well as i do we have discounted an amazing amount of news and accentuated clearly the positives and the mark so far i think has rightly recognized that the negatives can be solved. Dont you think sorry, scott, go ahead. Dont you think that all that matters right now when everybody is looking to is the timeline for consensus, consensus timeline for approval of a vaccine towards the end of the year rates can do whatever they want to do thats a single focus. Everyone wants to get long in front of that and spread out the can sectors. This has been a world war against a virus. Like all wars, there are many fronts this has had a health front, economic front and financial front. The fed came in carpet bombing the economy with liquidity starting march 23rd. Weve made a lot of progress on the economic front, though we may be slowing down the pace of recovery, but i think the recovery is still intact where we do seem to be making some progress is the healthcare front. You know, we have spent tri trillions here and there, and weve spent billions on vaccines, and theres a good chance something will come about that works and may actually lead to new Technological Innovations to deal with a whole host of diseases jenny, your target on eds target here . I think ed brings up a really important point when he says you dont necessarily need to have the large cap megacap growth companies. They dont necessarily need to decline. Its he says its the percent of change thats meaningful i think thats critical. One of the words thats been bothering me is rotation rotation implies that youre either that its either on or off, in or out how about just a broadening . I think thats what ed is getting at, we might have a broughtening of strength k48d be good for the market, good for everything, and we might not see crazy multiple expansion coming out. I look to look at the percent change of value that could be greater than the percent change of the megacap in the next several months. Lets continue to call our attention to the righthand screen s p 500 within five points of a new high we are in the midst of a broadbased rally on wall street better than 230 points, though the nasdaq, as you can see, is up by more than 2 you know, joe, the other interesting way to look at the market and have a conversation about money coming out of tech and into cyclical or into value, epicenter, whatever you call it. It doesnt have to be money coming out of megacap techs to tell that story. Look under the surface, if you will of some of the high valuation stocks go down the list money is coming out of tech vastly do several are down the point is money is coming out of tech. It doesnt have to come out of the biggest of tech to tell the story. Yeah, i would agree with that to a certain extent. Im long docusign. Im staying with it. But money is comes out of other places thats actually been hiding out those places are and clearly looking for the performance over the last five days or so i asked the team at cnbc to pull up some charts youll see theres a significant design and mub. The reasoning is youre seeing better economic numbers as it relates to manufacturing take a look at the iyt thats up 15 . Thats signalling to jennys point its not about a rotation. Its about a broadening. With that broadening ive got my 29 positions to the max. We are, as i think ed is directly forecasting were going to take a run at these highs, and attempt the breakout, and well see if were able to participate with new buys towards 3500 or whether well stall. I think thats whats happening right now. Cramer made the point today youre not going to have and id like your opinion on this. Youre not going to have the broadest of rallies in megacap tech, in what i call megavaluation tech, the ones we just named, which have huge valuations, and cyclical stocks. Cramer makes the point theres not enough money to go around. Money has to come out of the something if youre going to have a prolonged rally in value stocks the likelihood that it comes out of the microsoft it is, apples, and amazons, facebooks is fairly slim im never going to disagree with jim he watching the market all the time and comes up with good opinions a lot of people jumped out of market when it sold off, and the market rebounded so quickly a lot of people got flatfooted the market is not giving them that chance. Everybody wants to get out stocks it also could be a trade that leads to a meltup. I think it could provide us with a bull market where some of the laggards catch up. Theyre the once that will benefit from a vaccine and improving economy. Jenny, to toms appointed, 5 trillion of cash is on the sideline dos think its going to go to those types of stocks . I sure do im on a few investment committees the conversation has been about the fact that there is no return if youre thinking about replace why not look at utilities, look at stocks that are more bond equivalent so im quite quinned that tom lee is right with his 5 trillion i dont think money needs to come out what do you think about that, the notion that, you know of money having to come from somewhere, and take that next leg in the market. Can you really have mine going into the microsofts and the fangs money going to the while same have the Energy Stocks and for examples doesnt something have to give first of all, rates have been low for a long, long time. I dont think people will say a ive got to sell my bonds to go into equity. I wouldnt really classify the stocks you mentioned as tech stocks sheer theyre in the tech area but those are the stayathome plays. Those were the hyper momentum plays that people just didnt know what they were buying in terms of the others, theyre pretty solid so where does it come from . For example, i sold fort net out of the fort net i sold i bought some other names that were more leveraged to the economy. Like what once again, buy stocks, i dont buy sectors. You said you bought some other stocks which ones over the last week, we talked about foreand gm that i bought last week. Why who would i buy Johnson Controls the reason is they have done a great job managing the costs, quicker than most, and guess what i think there will be a lot of work done on their ventilation systems. Gen dynamics and raye thee on, actually so its cheap. They have good yields. So i wanted to spread my exposure to what i think is going to be a race to get that Covid Vaccine exposure towards the end of the year. Also, i believe youre seeing the reaction to the polls continuing to favor biden. Today is because he picked kamala harris. Before i let you go, ed, i think weiss is right had he pickedelizabeth warren, for example, the market may be trading differently today. I think that would bring up a much more the potential for a much more Progressive Agenda i think hes on to something there. If we have a radical regime change, the market would sell off on that initially. That doesnt necessarily imply that policies will change realically overnight the market will probably continue to move higher, but the stocks that will perform well broadband different from the once if trump is reelected dont get too bearish here approaching the election, just think if theres achange in administration, stocks may do well so stay positive, i think just recognize it would be a question of which sectors outperform relative to others ed, i appreciate your time well talk to you again soon raising his yearend starts to this year and next 3800 in 2021 also on s p record watch, 3381 is where were currently trading. Back on february 919th would be a new closing high for the s p you have to do better for the old intraday high. 3393 is the old intraday high. What about the stocks you want to buy right now right now the virus seems to be abating. The daily case count is coming down thats promoting the cyclicals, the values steve was mentioning a bunch of industrials there, some of which i own. 1 oy bought dover last week, but i think you can look in the industrials and look in financia financials im going to dare to say you can look at the to which im talking about exxon mobil, the things with the biggest Balance Sheets to noble survive know, how about that energy trade. Do you think theres something there . Only to a certain extent. I dont want people out there buying these mid cap Shale Exploration and production companies. Buy the big boys i do think theres something there for the energy trade i have exposure there. I also own the xle. Irthink cruel oil surprisingly is maintaining itself well above 40 a lot of that is the fast manufacturing return that were seeing in asia, and the surprising manufacture reason were seeing in europe. How do you view dividend stocks here . I think its meaningless in terms of the competitor. I think the different stocks by and large are super cheap you have things like enterprise products, and a huge dividend yield. Still trades along with sometimes where oil prices trade. And to. You mentioned the buying of General Dynamics thank you again, that dan loeb went into. How much more up side is there it depends on how you view the opportunity of their streaming, right thats loebs big bet. Thats what he made clear. I gra, its going to be in the near term the greatest opportunity to invest in the business and lose money. Its not like youll see the return the stock will go up as the skies part and blue skies emerge so you cant own them all. Its the difference from longterm investing. As you know we ball it around 116 a few weeks ago and intend to hold it for a long time we also think expectations along with the loeb investment pieces earnings are probably way too low and theyll pick up a lot driving earnings into the future we got within three points. We continue to watch that level. Were going to take a quick break. There you go well come back, and do a bullish call on target next, along with home debo and lowes, and a reminder, you can always watch us on the go on the cnbc app. The half is back, right after this jean, did you know geico is now offering an extra 15 credit on car and motorcycle policies . Thats great thats 15 on top of what geico could already save you. So what are you waiting for . John stamos to knit you a scarf . All finished, jean. Enjoy thank you. I give. The stitch work is impeccable. Its just a double fleck pattern with a reverse garter stitch. No big deal. Is your hair this soft . Softer. Geico. Save an extra 15 when you switch by october 7th. Geico. Puts its customers a wiin charge . Rier well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Welcome back it is another potentially historic day on wall street as the s p 500 approaches a new record high. Were about three points or so away from that 3386. 15 is the level we have to get above. Were going to keep our eyes on what is a broadening rally rahel joins us with the other headlines. Golf fans will not be able watch the masters in person. The tunment will be held without spectators the dates remain november 9th through the 13th northern virginia, a huge sink didhole has opened up, measuring about big enough to take out a road and hundreds of people in the neighborhood a Flash Flood Warning does remain in effect heavy storm damage in nebraska is apparently helping some elephants there the omaha zoo has asked local residents to donate downed tree branches, because apparently they make really good move for the pachyderms the animals are enjoying it. A Little Silver lining there weiss, you own target. So target had a couple rough quarters theyre picking up share early on digital i think youll see the earnings get back on track. That took away from the earns, plus a Scarcity Effect in retaye i think it would be one of the best performeding going forward. Thats the name of the firm, depot, alltime high, lowes target increased i ask you that, because you own home depot we sure do. Weve owned it for a long time one of things weve done recently is to go and categorizes stocks theyre forever work or better, and home depot is one of the fee companies that is forever unaffected i can see us holding this for ten years. Well use it as a source of cash, but its a longterm holding with no slow down to growth expected. Deere is currently negative, but its had a good run. That runup in valuation is part of the reason Deutsche Bank is downgrading to hold, but they see little up side for fiscal 2021 also roku with a buy analysts believe that with 50 of the connected tv market, r on ku assistants to benefit from increased ad spend, and then finally marathon price target here is 43. So analysts think that speedway say they see up side potential that said, its been under pressure this year rahel, thank you for that joe, you own it. I do. I got in the stock and there you go thats for them to decide. What im deciding is to stay in the stock. There is a lot of tailwince as it relates to machinery theyre at levels we have not witnessed in the last seven years. That will translate into future quarters, as the reason why im holding deere. I think it goes north of 200 easily you said you wouldnt touch it 185. Why have you fallen so out of favorite with a stock you used to love . Its a very simple reason i have traded it successfully in the past, pick up a onemonth chart of roku. It ends up going nowhere you try to answer the question, what direction is that next 10 move you cannot answer that from the chart. Its just not there. Youre not a gambler, jimmy yeah. I hear you i hear you. I always like your take on roku it was such a winner for such a long time. You know, heres the thing if you pull up like a threeyear chart, you see they see wild moves up and down. When i say wild, im talking about trip