Joe, whats this about what do you think is going on in the market, joe . I think this is an asbestos luts perfect technical correction that were experiencing and we have been experiencing from the beginning of the month i talked about it with you i dont think the time is now to be stepping in and thinking that its over. I agree with your opening. Tlp is further weakness that lies ahead for the market. Lets keep in mind theres significant weakness in germany. I know jim talked about apple being higher for the day as a good positive indicator. Apple should be higher wasnt able to sustain that its in a bear market. As long as apple remains under some pressure, you have to believe the overall market will have a bit of its own problem, dont you think. Possibly. First of all, we needed a correction whether its because the case, the daily case in europe are now ahead of the u. S. Or the debates next weekend or the election coming up we needed the sell off this is great thing. Investors have to remember, they have to be comfortable being uncomfortable. I think it was a healthy sell off. Would like to see more thats going to be a Good Opportunity to get back into some of these growth names that are having a tiny little correction right now steve, how do you assess whats going on in the market now and the way that investors need to not only think about it but put it in perspective. You have the virus situation over in europe, the uk and spain. 200,000 and counting deaths now in the United States and cases ticking up in a number of places you have the fall out, politically, obviously from the death of Justice Ginsburg. You have the possibility of chaos looming on election night. Thats not that far away how are we supposed to put that into perspective in the way were thinking about this market in. Well, the first thing is, stop trying to read the tea leaves apple is positive. Thats great for the market. None of this matters here is what does matter when the fed comes out and when they hold steady or take rates lower, the market almost always has a positive response to it. We didnt see that as a matter of fact, we saw a negative response from the getgo what that means is that investors have lost confidence in the fed but they believe the fed is out of tools and they dont believe that the fed is going to be able to drive inflation over 2 . You think that . I dont know i think people still have confidence in the fed. I really do or the market wouldnt be anywhere close to where it is now. Maybe its a realization it was a somber and fairly sober look at where we are currently in the economy regardless of what the fed can or cannot do the economy is what it is right n now. Its not great exactly i said the market has hasnt lost confidence in the fed they just dont believe theres more in the tool box theres a lot they can do to get the economy going. Comes down to the economy. It comes down to the election. Thats whats going to keep sort of a governor on the market. We know we wont have a president right now on election day. How long will that go . You go back to when bush got elected. I just see a much worsening trait situation. Youre seeing the opening again trade just dissipating im with brynn im with joe its too early to put money to the market the market really hasnt corrected. Valuation just hasnt taken a big enough hit for me to get comfortable. When you want to be uncomfortable when putting money to work but you also want to be easy decision in terms of finding values that you can really hold onto youre not there yet for either. Were down nearly 10 from the s ps nasdaq is down 12. 5 its been hit much harder. Jim, playing off what steve said, are we truly in no mans land until we get through november 3rd i dont think you have to wait that long maybe you do, but i just dont think so i think a little per speckive he perspective helps. All we have done is go back to july 29th on the s p 500 weve taken out the august rally. We have just vanished that which is appropriate it was frothy. It was based on a lot of call buying whether by softbank or robin ho robinhood. It was not fundamental and it had to come out. Now were at a level where sure, we may go down theres another 4 on the s p 5 hundre500. You may reach that moving average but thats only four Percentage Points away from there you can start growing again. Im not as negative as what i heard some people saying amen ago. The economy is in rough shape. The statistics are coming in better than expected and where it matters which is the labor report weekly jobless claims. The employment sub indices look pretty good. Theres risks but things are coming in better than expected right now. Maybe on that note. Steve has some information for us today that seems to be pretty decent, at least what im told for the consume arnr and the st of the u. S. Consumer stooe steve, is that right thats right. It plays directly into the conversation youre having with jim. It shows the feds Second Quarter funds account say the biggest quarterly gains ever in Household Net Worth up by 7. 4 trillion in the Second Quarter compared to the first. Equity value is up by 5. 7. Realize value gain 0. 5 the story is when you think about the economic effects of a stock market sell off, still a lot of house money out there on the other hand, it was the biggest quarterly gain ever in federal Government Debt up by 59 triple any quarter we had in the great financial crisis the biggest job ever in Consumer Credit outstanding, Consumer Credit falling 6. 8 . They helped a lot by the federal government a hugely rising stock market which is up more from the end of the Second Quarter the macro effects, i think theres house money to play with before it starts to dig into the economy. Lets get the view of another one of our economy members steve, thank you house money plus fed money, does that equal enough to off some of the issues i mentioned at the top of the program i think it does i dont think were going to get that much more of a sell off maybe another 5 until we come back to where are fundamentals and we mentioned, theres money in the house the housing money. The consumer is still strong no matter ha Political Party you look at, they will be focused on this unemployment number thats going to be really important before and after the election we needed this pull back do we have more to come . Absolutely i think they will be specific opportunities to look at and when youre looking at whole market, we saw tech really rally. A lot of the other stocks got left bebacack. Those could be stocks that were looking at now to get a more interested again i think you do have to get uncomfortable buying these its not easy buying these when we still dont know what is going to happen in the next six months if the market pulls back more then i look for more value i want to be clear because im looking at, im looking at this im looking at that doesnt tell our viewer whether youre buying this or buying that. I know those are two entirely Different Things we seem to be having a bit of a debate here on the desk, if you will, whether its virtual or otherwise on whether now is time to buy or not or will we have a more significant correction in stocks are you saying now is the time to put money to work if i have clients who have bas excess cash, i am starting to put that money to work i will buy jpmorgan and chevron and honeywell. The danger, of course, gang, is the market is vulnerable to a bigger pull back thats what Morgan Stanley mike wilson is talking about today. Hes going to be with us tomorrow youll hear directly from him. Well discuss his note and commentary today even though hesitate sticking by his view were in the early stages of a bull market, he says we believe the s p 500 and nasdaq 100 remain vulnerable to test their 200day moving averages just so were all playing in the same sand bok herx, the s p 5000 day is 31. 04 and the nasdaqs 200 day is 94. 89 stooe steve, thats going to be painful for a lot of people if you have another 7 dmoun the s p and another 14 down in the nasdaq which led on the way up in a very concentrated tape of a select number of names that had these large gains and really carried the load for everybody i dont necessarily buy into the house money market when the market is going down, its painful lets keep in mind we have, in my view, a lot of weak handed, weak holding by the Robinhood Group and people that came into the market late. Theyre not that loyal to the market were seeing that reflected in snow, snowflake that just came public they dont stay there for a very long time because its a new holding. They dont really know what they have they bought the momentum could be painful im pointing the the november election for the period i think the volatility will stop if something gets cheap, ill buy it for example, xpl logistics, we had an upgrade of u. P. S. We had many upgrades of federal express. That stock is down more than 10 in a week. Theres opportunity out there. Can i jump in on that when were talking about have things gotten cheap enough, i think theres an important fact that doesnt get enough press is theres been a ton of equity etf and Mutual Fund Outflows all year january there were fund inflows. Since january, theres been about a 350 billion out flow from equity mutual funds july alone was out 60 billion thats the cash on the sidelines. We speak about it when we say hey jim, hey steve, you have some cash on the slide lines, when you going to deploy it. Thats large number of people waiting the buy the dip. Are you going to wait for something worse. I dont think with the fed support and were questioning it, i get that i dont think what the level of fed support right now that you should wait much longer. If the s p 500 goes down 4 , it gets to the 200day moving average. People are buying the dip at that level a lot of people say they wil buy the dip until they are staring the dip in face. Thep it feels bad and they are afraid to buy the dip and theyre not sure if the dip has run its course even though the points you make as the why you want to do that, sound great. Human action is a lot of different sometimes than what people say its rare when the nasdaq touching its moving day. It was 2016, december of 2018, this year and march. It is rare when it gets down there. It would be historically a tremendous, tremendous buying opportunity. I dont think it will get there. Square is now up for the day nvidia is up to steves points about the fed intervention, theres so much money on the sidelines, i do think these sell offs are going to be short and shallow and maybe quick. How does whether biden or trump affect square Going Forward . I think as we get closer to lek, people will move back into tech because you dont have such a binary outcome with tech as you do with so many other industries if theres market upset as a result of uncertainty related to the election, those stocks may go down with Everything Else just because the market has a bit of an upset. I want to continue the conversation i do want to go to ilan. The government will be kept open beyond september 30th thats according to a source familiar who says the bill will keep the government open through december 11th. Thats after the election. The bill will not include a white house request for provision related to farm aid but it also will not include a provision the democrats asked for related to reduce cost for School Lunches that appears to signal that the talks to keep the government open do remain on track. Lawmakers should be able to avert a shutdown before september 30th even amidst all of the heated political rhetoric were hearing over the Supreme Court. Scott. Thank you as if we needed another thing to keep ourp eyes on down in washington thank you for that lets talk about the other side of the equation. All these things to be worried about and then joe, you have a note today out from two pretty good market watchers portfolio rebalances should be a tail wind for stocks next week jim kramer said stocks have been down for three weeks its time. Maybe they are down enough keep an eye on apple which as we said had entered bear market territory and was around the flat line there. You do have therapeutics, antibodies, vaccines down the pipe as well how do you factor that in . I dont think the rebalancing catalyst is going to be as strong as we saw in month of april coming off of march. I think that earnings could potentially be a positive for the market i think as i said before the performance of apple, apple should be positive in this environment. Im going to continue to use the word vulnerable. I heard mentioned before a quick, fast correction maybe a quick fast correction isnt the correction that we need most. Maybe what we need is a normal correction which takes three to four months and where the market goes down somewhere around 13 its a tremendous amount of negative news that the scott has had to digest here in the last four days. I would offer its probably the strongest amount of negative news that we had since march on friday, you had the single bilgest outflow the qqq that you have seen since october of 2008. Then you get the news over the weekend about india and uk, viruses rising you get the passing of Supreme CourtJustice Ginsburg this is this calamitous environment of negative news i think the pressure on stocks given wrp thhere they were one h ago is not going to abate soon when we know were coming into a more hot volatile election season i think those are all valid and good points to make. Well discuss them with our next guest. Tom lee is fund strike that global advisers. Welcome back thank you have we enter into a dangerous period now because of many of the things joe said. Yeah. I think the market is dangerous now. As scary as this period may be, i think its likely stocks will make their lows before election day. I think everything that your panelists have said, i would agree with which is since 2009, we have learned when you have deep pull backs like this and its painful but the vxx is not making a new high and we have 4. 4 trillion of cash on the side lie sidelines and we know the pmi is telling us a pretty vigorous economy is under way and the fed is accommodating this will be a huge. I want to make sure we understand each other because we have highlighted when you have been positive and youve been positive more often than not and youve been right to be that way because the market has obviously followed suit and performed the way that you thought it would. I think part of it is the leadership growth and tech have been leaders. Thats 76 of the market cap once we get through this period of choppiness in election day and the focus is on the economy and the recovery and stimulus passing, thats going to be more favorable for cyclicals. If i was a long term holder, i wouldnt be doing anything how much more downside do you think exists in market do you agree with the mike wilson narrative test that. Its not insignificant to the down side from here. The 200day would be a magnetic level im sure the market could test that level but when we look at how over sold it is, were pretty close to where we were in late march i mean, i would be looking at this as an opportunity and not as something to try to sell to avoid 4 downside. I would look at this as a massive amount of emerging opportunity being created. Youre sticking with your s p target which is what 3525 for end of year . Yes, thats right thats a lot of upside from here im just trying to get there in the face of all were facing. How do you view the virus right now and the impact it would have on the market . We look across the pond and see whats happening in spain and the uk its concerning to say the least. Its not as though we have completely controlled the virus here in any stretch of the imagination regardless of what you may hear in certain places how does that factor into what can happen in stocks because you have to consider the performance of the economy between now and the end of the year to get to that pretty considerable distance between now and your target of 3525 youre 100 right the virus is probably the single biggest macro factor in 2020 its caused the fed to enact global shutdowns i think there is, you know, an economy that still stuck in neutral. Organically it does look like the u. S. Is not necessarily seen it dispyappear but it is under control. There is much Better Health outcomes theres a lot less death in the big binary affect is if we get therapeutics or a vaccine or a cure i would say one thing we dont know if if theres going to be a second wave. Predicting the path of virus is really difficult and i think a lot of forecasters have a divergent view theres a will the of people think its contracting its not contracting in a number of states around the country. Its up double digits in many places i want to stay with with facts regardless of what people say or what they think. Numbers tell the story thats what were going to continue to follow tom, thank you thats tom lee joining us. All right, joe tom lee is kind of sanguine. Hes told everybody to go into the places that may feel like the most dangerous, the epicenter stocks e sounded a little more sanguine than he has been agreed. I agree with tom whoever it is that wins the election in november, i think the s p will exceed the 3588 high that we have from earlier in september you cant offer the steep ping of the yields curve. When it begins to flatten, just begin to ignore that you cant look at european equities and say a day down 4. 5 and ignore that. I think the market remains in a very vulnerable position on day when were talking about you sold jpmorgan im sorry for interrupting you you sold jpmorgan and chevron . Sure. I sold them towards the end of last week. Im concerned about Financial Institutions i looked at my ownership clearly, there is going to be, as we get towards the election and other side, a Regulatory Risk as it relates to the Financial Sector given where the market is right now. I thought with jpmorgan, i would take the profit that i have from earlier in the spring as it relates to Chevron Energy just absolutely trading awful. Natural gas is below 2. Oil seems to be failing here in the 40s i own not a Single Energy equity you ment