Leventhal and liz young. Liz, is this all about stimulus or are were genuinely concerned about these cases were seeing in europe . And, by the way, were doing a lot of cases here every day, too. I dont think its all about stimulus but were in the middle of a really heavyweight news cycle and its not allowing us to look out any further than about 30 days at a time. Ultimately in 30 days time the market is lower than today just on monday the s p was up 5 month to date. That didnt make common sense. Were in the middle of a highly c contentious market season and were still waiting for stimulus in the short term i think we should see a pull back here but in the longer term and even in the next three to four months, some of the fear around a blue wave has been a little overblown and the market has to weigh the two sides. On one side we might see higher tax ees and stronger regulation and on the other side some of the tariffs may be rolled back as an investor, even if we have a pullback in the short term, you dont do anything about it because youre not going to put money back on the table soon enough to catch a rally on the other side josh, is that what were looking back, the market pulling back over the next 30 days or so if that happens, what should the investor do . Im not sure that thats what were looking a the pt per se b investors are very good at processing information and moving on with their lives weve seen the resilience to get to the next news cycle rather than dwelling on the current one time after time. This year is a great example o that i think theres a bigger story playing out right now, which is in shares of fastly. This is not an Important Company but whats happening to its share price is very important and ill explain why concisely as i can i fastly is not in the s p 500 why . They dont earn money. Its part of a group of stocks that have captured the imagination of investors, especially this new class of investors that have come to dominate the market in the daily trading this year. Whats happening with fastly is serving as boston cautionary tale and possibly canary in the coal mine for a lot of speculative activity in nasdaq names. This is a company that said instead of coming in with 73 million in revenue for one quarter, theyre going to come in with 71 million wall street took 30 off its market cap after that. Anyone that run as business knows that if you do 71 million and not 73 million, its really not that big of a deal, but that is a sign of how much investors had been bidding these stock up and how unrealistic the expectations of perfection have been and i think youre seeing a lot of names that are similar in terms of who owns them selling off in sympathy. This is the type of thing that could really snowball. Thats on my radar today im glad it is because its on mine. I do think when you have a stock thats up 360 year to date and your point is so well taken, as jim cramer said this morning, normally 73 million to 71 million not a big deal but when your stock is up that much and your valuation is as big as fastlys is, 73 better not be 71, it better be 81 thats the point that jim made josh took the words out of my mouth. I was going to ask you guys if you this i this is canary in the coal mine, if were going to be looking back and saying fastly tipped the scale against a lot of these stocks that have run up a lot. Cloud flair, 233 , z scaler, 226 , way fair, 222 , docusign, 218 , twilio, 228 and on and on and on its not in my consciousness today. I could care less about fastly ill tell you this, if Companies Come out, even if we see, you know, the most recent come out, the ones that are more egregiously overvalued and print a number better than expectation, everybodys going to forget fastly so i dont really care about it. What i care about is i care about stimulus, which will happen maybe not in this time that were looking to are before the election or that trumps looking for but i think the market is comfortable with it happening after the election we saw a minor impact yesterday after a big move, that 5 move earlier in the week. We saw a minor move yesterday when the mnuchin comments came out about a deal not happening my biggest concern is the virus. Were seeing a spike in the vast majority ofstates here were seeing a temporary hospitals put up again in wisconsin. Were seeing europe locking down i dont think we lock down but when i look at the cold weather coming in and seeing restaurants a the least in the east, mean not in criminal, but in the east, theyll be shutting, people arent going to be going out, that feeds through the supply chain thats a much bigger issue and one of the reasons why i stare reducing exposure yesterday. I havent sold anything today. Fastly, maybe the robinhood crowd but i dont care what they do i dont disagree that bigger pictures are looming over the market than a 30 decline in fastly but dont you agree this is a call, perhaps, to take a look at some of these stocks and realize that even as a zoom has, as deserved in some respects, has had a great run because of everybody using it, its become part of our lexicon, that maybe 682 year to date is something to take a second look at or a peloton yes, we know why its up but 373 year to date, steve so a fastly just sort of raises your eyebrows and says you know what, maybe some of these stocks as great as these companies are have gone way too far, way too fast and if theres a big pop of the air bubble there, a lot of those names could come down by a lot and thats going to affect the psyche in the overall market i dont disagree with that, that some of these names are egregiously overvalued i own peloton, its vastly overvalued but the market hasnt cared about valuation for a while. Thats our point. Did fastly just ring the bell and say now you better start caring about valuations . No. Let me ask you this. If snowflake comes out and reports a better number than the few that follow it haveoton com better number, do you are th think theyll its about expectations, too, jim. Youre missing the point. Fastly going up by the magnitude i need to hear from jim first. Like jim cramer said this morning, 73 million cant go to 71 million, it has to be 81 million to justify the move in the stock that josh mentioned. Its absolutely true. The jury is still out whether today is the bell ringing or not. Lets put this into perspective. In the last three months, this is the fourth draw down just in fastly of 20 or greater when you get in this rarefied era, these things are going to happen lets say this is the ringing of the bell for fastly and the Software Stocks and new economy stocks i dont think that has to be contagious to the rest of the market in fact, i emphatically think it does no the have to be contagious i look at the apples, googles, microsoft, all three of what i own and i say in this Interest Rate environment and the secular growth theyve got, they are perfectly fine at that valuation and those are the ones that are going to matter more than this relatively small subset of stocks that are very bubblicious. Josh . I opened my comments today by saying fastly is not important its not an important stock. Its not even in the s p 500 the point that im trying to make, which maybe i didnt make it well i thought you did make it well okay. You look at these things as a thank you as a gauge on sentiment and as a gaej speciug specifically on the sentiment of the new investors thats come into this market in the last six months and individually theyre not big portfolios, theyre not institutions, but in the aggregate, they are a driving force behind multiple expansion across the entire market theyre most of the options activity, we know this empirically. Its an important contingent of investors that get affected by things like fastly steve and jim are wiser, more experienced. Theyre not caught up in these types of stocks. Great, great but were talking with the vast majority of investors who have been captivated by these stories. This is important. If you look at the russell 3,000, there are 416 companies losing money the average return of these companies this year is 57 its outrageous. 116 of those stocks are up morph 100 these are the stocks were talking with and some of them are very big some of them are way bigger than fastly my point is lets just keep an eye on responses in relatively small disappointments. Right what the result is in the share prices because to me thats very telling of when the worm turns and people say, you know what, i dont want to own any of these stocks, theyre not going up anymore, i only want to own them when theyre going up the point josh was making is the point i thought we were having a conversation about. Josh is exactly right. This is not about fastly itself. Who cares in the bigger picture. If youre shareholder today, you do care. The company is obviously good at what it does it ran up a lot. Its a conversation of what could happen to sentiment for a new class of investors who have helped push this market to where it is, liz yeah, so heres what i think it is. I think its an indicator of where there might be vulnerable becau because of that type of investors. If we see stress, the first things to go are going to be stocks that people have the biggest gains in because theyre easier to sell its easier to sell something youre up 80 in than youre up 10 in but for the broader market, i dont think that necessarily changes the story. And i agree with i think it was jim who said it, it doesnt have to be contagious through every sector but that individual investors is going to exacerbate moves on the up side and exacerbate moves on the down side because theyre not at this point longterm traders. I would say, jim, that it potentially has the possibility of raising the bar for everybody. In that group, if you will now you better knock it out of the park or youre going to get fastlied, youre going to get stiff armed like what happened in the Football Game goldman says its time for value. They go downgrade to tech for a neutral. Thats peter oppenheimer, their global chief equity strategist steve, what do you think about that i think that we talk about value too much cats had a big move, deeres had a big move, theyre tickling the value bucket ge theres still growth in technology we saw with apple now with 5 this the 5g, what was lost is how that goes to the entire academca academy its going to a 13 trillion by 2025 if that was correct on fastly, id say snowflake would be down 10 today. Snowflake is down 2 not everything is going to go over the waterfall on the same day and it may never you got to way for the next one to see what they deliver the point was made earlier, and i think you made it, if such and such company delivered a great quarter, do you think they would be down . No the answers no. Fastly couldnt meet the bar because the expectations had come up so high for a stock up better than 300 for a single year and it should be whacked. And it is getting whacked but that doesnt mean everything is going to or needs to today you need more evidence before you get in a barrel and push it over the waterfall the other story i want to get to is the airlines. Jim, you see whats happening to united today their ceo saying after earnings that the biz travel wont be back to normal till 2024 jim, you own alaska, which is down as well who knows whats happening with stimulus but this is yet another reminder, and by the way, wall street got this right when they said were not coming back to normal for three to five years that appears to make the case because the beg money making routes, biz travel, is done for at least right now ill come back to alaska in a second if youre looking at united, american or delta, you have to say to yourself what fraction of profits for the next five years are going to be accumulated by you as the equity holder the apes is zenswer is zero. You are taking out debt like crazy just to stay alive and youre shrinking your roots, your business. The stake holders that matter are the debt holders, not the equity holders in those big three, youve got a big problem. I dont want lalaska to overswam what i just said they have no net debt effectively. If youre looking at airlines, youve got cash burn, debt levels going up astrong omically thats not place to invest but youre in that stock. No, you go ahead i apologize. I dont think the Airline Industry is going away and im willing to pick a winner on the other side i think alaska and southwest are the two that will win by virtue of the fact that they basically have no Balance Sheet stress at all, basically no debt their cash burn is very close to zero so, you know, thats where when the dust settles, youre going to see equity holders accumulating profits that for them is going to grow. Were going to take a quick break. When we come back, its a story that is getting buzz on the street today what the Trump Administration was reportedly telling wealthy donors in private about the virus in february while saying Something Different on this very network. Te klykael of the New York Times will join us next to discuss. Welcome back ill show you stocks here that are worth keeping an eye on. There Mitch Mcconnell has rejected a higher amount for covid19 stimulus, said his plan, 500 billion bill is the appropriate response that comes after the president during an interview not that long ago this morning suggested going higher than 1. 8 trillion was the way that he wanted to go so well continue to watch the major averages dow is down about 143 or so. A new story in the the New York Times raising questions about what the administration said publicly about the virus in the winter versus what it was telling some in private. Kate kelly, the author, joins us great to see you great to see you, scott this all stems from a meeting that a Hedge Fund Consultant was at on february 25th, only hours after larry kudlow said this on our network. Well listen and ill come back to you i just want to say, though, as far as the u. S. Is concerned, when you look at this, you had a little higher head count on the infections because of the cruise ship people coming off, we have contained this, we have contained this i wont say airtight but pretty close to airtight weve done a good job in the united states, hats off to our Public Health people kate, based on your reporting, what happened after larry kudlow told our viewers that about two and a half hours after that, he had a private session with the board of the hoover institution, housed within Stanford University he moderated the comment to say we think its airtight and contained but we just dont know it was subtle but showed the ambiguity that others were dealing with in a franker way than he said on kellys show that morning or afternoon. And you said that private meeting helped fuel the selloff in stocks. It took place over three days, started with a key note address with mike pompeo, secretary of state and at that point you had a selloff. The market topped on february 19th after that you saw some selling activity it really took off monday the 24th, tuesday the 25th and into wednesday the 26th and so kudlow was one of the meetings that sort of sparked some doubts among at least one apparently influence attendee at hoover you also had the council of economic advisers who was at the time the acting chair and others who were on a panel of that council talking about the economy. And one thing phillipsson did was decline to speculate on what gdp growth with be this year in light of the virus how was the virus going to impact gdp growth. Larry said it would be 200 basis points but in this setting, he said its just too dynamic, i really cant address it, i cant comment on it. That was another sort of tell for this person in the audience, whose name was bill callanan who wrote a memo about his findings during those three days in d. C. And other oneonone meetings he had as well with a democratic senator. He sent this email, about a thousand words long, but not a memo in traditional sense. He sends this to david at thete because they are in a dialogue about whats going on with covid. Essentially tepper and at least one of his employ heees shared i with clients in the market and the word started getting around the marked and i first heard about this on february 26th because it was that widespread that one of my contacts called me and said i worry this is about to get ugly and cited things that person heard from the memo once a memo gets out, it starts going around like wildfire to your point and everybody gets their eyes on it. I know you mentioned david tepper, you also know that i spoke to him last night and he made the point that his view was already well informed by the time the memo went out his response to me last night, we were already concerned about the virus in january after reading the lancet report and went on cnbc with a public warning. The information from the hoover meeting meant little to us by the 24th. So listen to david tepper and what he told jim cramer ter vate very begin of february where the super bowl was and aired on our network on february 3rd. Heres david tepper speaking to jim cramer. You have to be careful. It may be a game changer you have to be cautious. Two weeks ago before the virus was unthione thing and its a different environment. It is what it is by the time that memo, whoever it was relayed to him was brought up, he was already on top of the virus from the time he saw that lancet article in january and started acting as such in terms of how he would be positioned i agree and ive written on teppers position a couple of times it was a conversation that the ceo solomon that made solomon feel worried about what was coming and looking at contingency positions for goldman sacks. Tepper was one of the cautionary vi voices on coronavirus. I dont know the complete story between tepper and this gentleman, it may be why they were dialoguing in the first place. As tepper said to me, we were in the information flow at that point, meaning late february people were calling us about covid, we were calling other people to get information. He noted to me he had been studying the fact that Milan Fashion Week was going on in late february at a time when virus cases were spiking in italy and he thought that was somewhat insane, number one, that it was happening and that also people hadnt taken note of it he founpoints to that and the administrations reaction is hes watching the traffic going back and forth between milan and saying how in the world can this be happening it speaks to what some term this lost month of february where, you are know, not much was certainly said publicly about worrying about the virus now, the treasury secretary was on the network this morning on squawk box they asked him, steven mnuchin, about your story not surprisingly perhaps he took some shots at the the New Yor