Delays from washington from the trade deal to the stimulus negotiations, deadlines and expectations being pushed back the weve got 59 minutes left to go in the trading week s p 500, 16 points from a record close. Down right now, jon. Still higher on the week everyone except the nasdaq great to be with you this afternoon. We have a big show coming up to finish out the week. Were going to speak with minneapolis fed fred neel sakashkari and later, as stimulus talks grind to a halt, well speak with Maxine Waters about whether there is any compromise to be had. Plus, shell discuss a new bill encouraging the fed to use authority to close the racial wage gap in this country mike santoli is tracking the Market Action. Start us off on the broader market. You can call it resilient or fatigue or really anything a standoff here at the record high levels of the s p 500. The past four days have basic clind of touched it or been shouting distance of it. The were just hovering there. Up 3 or so month to date. That is not bad. Supposedly bad month of august i like to show a one year chart right now. The total return of the s p 500 on a 12month basis is over 20 right now. Maybe people feel like this market is priced a good deal in. Again, nothing has disturbed this idea that were in this this uptrend even in fact the all time high levels is a pretty decent spot, i think, for bulls to wait and see if it has enough energy to break out above it and for bears to say lets make a stand right here the market is a little ahead of itself maybe it will take a patented monday morning pop higher to make a real effort at the high if we dont get it in the next hour or. So sarah mentioned this rotation going on i think its incorrect to call it a rotation into value from growth much its much p more about rotation into cyclical sectors from defensive growth sectors. So this is the s p 500 value index. That is basically done this month exactly what the s p 500 has done slightly outperforming industrials up 1. 8 . Rcd is the equally waited discretionary. Also up 8 so therefore bullish on the domestic spending. Things like Home Builders and things like. That you have a Home Builders pure play. Building on an already strong year it shows you the market is trying to get traction behind this idea. Even if we have this big air pocket in terms of consumer budgets. Im wondering, mike, i look at that s p 500 chart year to date and were right about where we were when things went off the cliff in february. But what has changed certainly everything is not the same as far as the s p 500 goes. Just a number is about the same. Thats right. The composition of the s p 500 is vastly different today than it was back then youve had greater concentration in those huge faang type stocks. I think that if you look at the overall index, more than a third of it still is down more than 20 from a high. So its really been kind of rotation from the many into the few. And now the question is can it broaden back out if in fact we get a little clarity and what the economy is up to and if profits can rebound as much as the forecast now says. Yeah, banks still 20 from the highs. Energy 40 from the highs. Utilities 14 . Mike, thank you. Well see you in just a bit. The senate is officially adjourned until after labor day. The but President Trump still making some stimulus headlines this afternoon we have them for us. Yeah, a little news that White House Press briefing this afternoon. The president said the federal government is going to activate a clause in an existing contract to distribute vaccine ands vaccine related supplies that had impact in the shares this afternoon people reacted to that news. Its an existing contract that the federal government has with them but this will activate a clause that will allow them to distribute the Vaccine Supplies if and when we get a vaccine for the federal government to distribute meanwhile, the president as you say on the stimulus negotiations continue to really dump on the democrats blaming them for Holding Everything up. Heres what he said. Ive directed the secretary of the treasury to get ready and send direct payments, 3,400, for a familiar live foy of four to l americans. Democrats are holding this up. I am ready to have the u. S. And sba send additional ppp payments to Small Businesses that have been hurt by the china virus democrats are holding this up. So the president there saying hes ready to do those things. The no indication that, of course, he has the authority to do those without congress. The president signalling here he wants some movement in the negotiations which have completely stalled out f you ask the democrats, theyre pointing the finger at the republicans as well so there is a lot of finger pointing going on in washington. Not a lot of negotiating going on in washington and speaking of not a lot of negotiating, reuters is reporting that those trade negotiations that were scheduled for saturday, tomorrow here in washington between the United States and china, those are on hold the reuters reports. No official confirmation of that from the white house just yet. But that indicates that that phase one talk that was set to happen may not happen as planned. Still though, there is no expectation anything is going haywire with the phase one talks. Both side have an incentive ahead of the u. S. Election to keep that deal on track. Back to you. So heres what i dont get. What is the white houses position on stimulus im not sure i understand why theyre at odds with the democrats that want to spend more President Trump is not face call conservative he added plenty to the debt. Understands that more stimulus equals more economic growth. Weve seen that over the last few months why arent they trying to make a deal with the election approaching. Democrats said they want a trillion dollars for states and local governments. What the president tweeted and said goen day, hes ready to send money to states and local governments. Maybe he is signalling here some ability to concede on. That the problem for the sprez there are a lot of republicans on capitol hill in his own party that dont agree with that but feel there is already been too much spending. That a trillion dollars or more is far too much. The secretary said a trillion dollars is a ridiculous number earlier on in this negotiation all right well see where this one goes, of course. You bet after the break, minneapolis fed president Neel Kashkari is wanting to do a shut down to battle the coronavirus youre watching closing bell on cnbc. Industrials and energy best performers on the week a four to six week lockdown. What the president says needs to do to combat the coronavirus he lined out his thoughts. He said here is how to crush the virus until vaccine as rife. He joins us now in a first on cnbc interview. President kashkari, great to have you here. Thank you for having me good to be with you. So my biggest question around your plan is havent we already tried that i mean we did that a few months ago. It devastated the economy. Worked a little bit for the virus. But then didnt crush it numbers kept rising again y would we want to do that again well, youre right. We did a partial approach of this in the spring but we gave up far too soon. And it was not nearly strict enough you know, we looked at research that says around 38 or 39 of workers in america are in essential industries but shutdowns were very varied in minnesota, 78 of workers were deemed essential. It was a very partial shutdown then we gave up far too soon as a result, the virus is now raging almost out of control across the country with 50,000 cases a day. We have this very muted uneven economic recovery. Their economies are recovering much more quickly now. So we basically, we blew it the first time and the doctor and i are arguing we should do it right this time. Not sure. Do we really have that Second Chance where we can do that to our economy . Were already seeing miles long food lines at some food banks across the country Small Businesses are shutting down thousands, i he mean, you know you speak to the people. Wouldnt that cause permanent damage to do that again . We can have a rocky muted recovery for the next couple years until i hope a vaccine, a miraculous vaccine will bail us out of this or we can try to take more aggressive temporary measures now so we can have a morrow bust recovery right now the School Districts are welcoming the students back in Person Learning again. And we would have to monitor, you know, should down the. You dont completely put out the virus. The you drive down the enough so that Public Health officials can contact trace, test, and manage any potential flareups. We have given up that right now because the virus is raging out of control i wish there was an easy answer. We have a bufrnch of tough chois to make. We have a lot of economic pain out there in the meantime we dont have a stimulus deal from washington. No negotiations even happening whats the impact . Its profound. The best thing that has happened in this terrible crisis has been the way that both parties have come together in congress to provide a hot of assistance to the American People who have been laid off and business whos have been directly aeffected. They need continuing support until we get through this. If we dont arrest the virus and this is going to be burning for the next year or two, people need support for the next year or two if we were to do aggressive intervention now, the bridge that they would need would be much shorter and more affordable than having to provide assistance but it is very important that Congress Continues to provide support especially to those workers who continue to be unemployed speaking of congress, some House Democrats are proposing expanding the feds mandate to close racial gaps in jobs, wealth and income. I wonder, can you see a way that is practically workable for the fed and do you envision any unintended consequences if the mandate were to expand in that way . Well, we have the duel mandate, i know you talk about which is stable prices and maximum employment and we can think of those things as like a seesaw that sometimes were trading them off each other. I think we have to look very carefully at if you did try to use monday taketary policy to c gaps of different races what would happen on the inflation side of the equation one mistake that ive been vocal about for the last five years is we raise rates prematurely before we had really achieved maximum or full employment and that put a damper on the labor market well, i think were learning from that experience and we want the labor market to strengthen as much of as possible and that when the labor market strengthens, it brings everybody in it really helps everybody to succeed. And so im comfortable we have the tools within our duel mandate. Im cautious about what it would mean for inflation if we change that and just focus on one group or on gaps directly. Is there a way to study that then, do you think, and provide feedback on that before the request or command comes down one way or the other absolutely. We have a Research CenterWhose Mission is to study the different gaps what are the causes of the gaps and what are the policy levers that could close the gaps . Poeblly Monetary Policy but certainly fiscal policy probably has a much bigger role to play we should be studying them we should all the resource swrez to bear. We need to be aware of potential tradeoffs. Lets talk fed policy for a moment the fed is really all in here. Zero rates pumping trillions of dollars in terms of liquidity. What more do you think the fred should and can be doing if the outlook deteriorates all of colleagues said this the path of the virus is going to determine the path of the economy. The most important thing anybody can do is get the arms around the virus so we have confidence to go to Football Games and to go back into classrooms, et cetera there is not a lot for the fed to do now. Were providing a lot of liquidity and making sure that market are functioning and that companies can, you know, reach the Financial Markets to fund the operations once we get the virus under control and its really time to put everybody back to work and to restart the economy as aggressively as possible, there may be more that the fed can do. In the interim, there is talk about our Forward Guidance and providing stronger commitments that keep rates low. I think right now the fed is in a good place why is the fed buying bonds apple and amazon it is high quality bonds youre saying who is a Favorite Company and not a Favorite Company. We want to make sure that Financial Markets and Corporate Bond market is functioning so that Healthy Companies can raise the money they need. Ill give you an example in march when the crisis was in full swing and people were fleeing and they just wanted cash, you were seeing bond markets starting to dry up and what we didnt want to have happen, we into you that Airline Companies and Hotel Companies were directly aekt iffffected be coronavirus. We didnt want to have companies that were sound not be able to raise money just because markets were freezing up so the fed introduced numerous different liquidity facilities to get these markets functioning again. And we would much rather provide broad base support thats why were buying against the indices. We were just talking about racial wage gaps we could have been talking about stimulus also. It seems to me that Congress Keeps asking the fed to do things that congress and fiscal policy traditionally have gotten done do you see any dangers there down the line . I think were keeping our eyes open and want to keep the fed nonpartisan and nonpolitical and focus on the mission thats congress has given us. Keep in mind, the Federal Reserve is created by congress they gave us the duel mandate. And we have to be responsive to them i hope that they recognize and we will certainly continue to advocate that there say place for Monetary Policy and problems that Monetary Policy can address. But there are other problems as you say that are better addressed by fiscal policy i think well be vocal about where we see the relative tools playing. Im much more focused there is a bounce back from a very low q2 im much more focused on the labor market that to me is a much bigger indicator of where the economy really is and how the American People are really faring the real the headline on Unemployment Rates around 10 . I think the real or effective Unemployment Rate is close to 14 today. Those are astonishingly high numbers. Yes, theyre lower than they were a month ago but theyre still astonishing high numbers, much greater than the recession. You have distant learning and many restaurants running at partial capacities or shut down, the job Market Recovery is slower of youll see many more businesses go bankrupt because they can endure. Think about a restaurant that is running at 25 capacity. How long can they do that . Can they do that for the next year or two you paint a picture of sluggish growth and a lot of challenges why is the market at record high and managed to bounce more than 50 from the march lows . Does that make sense well, i think its a couple things one is i think because the Federal Reserve was so much more aggressive than it was in 2008 that provides a lot of support to markets and youre seeing a lot of liquidity in the system that does find some of it in the way into asset prices and stock prices and bond prices i think that is partly reflecting that. And i also think markets are saying, well, congress has come together very aggressively to support the American People. I think markets are betting that congress will do so again even though theres been a delay this time but at the end of the day, im going to keep coming back to something that all of my colleagues have said we have to get control of the virus. If we really want the economy to fully recover. Im not sure there is a way to do it even though you point to other countries, look at what is happening. New zealand is seeing a flareup parts of europe are seeing a flareup until we have a vaccine, feels like its going to be with us, shut down or not well, no. But there say big difference a flareup of a few hundred cases in some of the countries or 1,000 cases is totally different than a flareup of 50,000 cases a day weve thrown in the towel. Other countries, yeah. If we had 1,000 cases a day, our Health Care System would be able to identify those people we would have plenty of Testing Capacity its no the that you have to get it to zero you have to get i low enough so that the Health Care Capacity can monitor it and control it. Mesh exceptionalism, are we the only country that is the only advanced nation that is incapable of doing this . Find that hard to believe. Yeah. Its an interesting idea thanks for coming on to talk about it thank you for having me appreciate the time president of the minneapolis Federal Reserve. Still ahead, another big interview coming your way. Were going to talk to Maxine Waters about the stimulus impact in washington and her push fo