Market Recap: Monday, May 11

Stocks posted modest gains on Monday, with the Nasdaq and S&P 500 ending a choppy session in the green as a growing number of countries and U.S. states planned or began the process of phasing out stay-in-place measures that have hobbled the global economy.

Video Transcript

AKIKO FUJITA: Welcome back to The Final Round. We are seeing a bit of mixed picture as we close out the first day of the trading week. Here is the closing bell.

[BELL RINGING]

And taking a look at where things look, or how things look at the close, we are seeing the Dow down about 109 points, though the NASDAQ up 71, and the S&P up about pretty flat, I guess we can just call it there. Certainly looking at some of the big performers today. Big tech continuing to lead the way. Apple, Microsoft, Cisco, Intel some of the big gainers. We should note that in this hour we are awaiting a press conference out of the White House. I expect it to start within minutes here.

The White House press briefing expected to cover a few announcements we have gotten so far. Number one, the White House issuing a memo a short time ago requiring all staff to wear masks in the West Wing, and we're also expecting the president to speak about where things stand with testing. He is expected to announce $11 billion in new funding for coronavirus tests to be distributed to states. This, of course, coming as he has faced a lot of criticism from these governors who have said they haven't gotten enough federal help. We've also been monitoring what's happening at the White House after Vice President Mike Pence's Press Secretary tested positive for the coronavirus. So again, that press briefing expected to start momentarily, and we will go to it as soon as we get some headlines out of there, but let's turn our attention back to the markets today as we pointed out a bit of a mixed picture here.

I want to bring in my co-host Myles Udland to talk about what we saw today. You know, Myles, in some ways things don't look as bad as he did several weeks ago, but investors are still kind of taking a defensive stance here. We saw that note from Deutsche Bank today saying that equity funds are the largest outflows since March last week. The inflows, we saw, into bonds, so that seems to suggest that there is a bit of a defensive stance still going on despite the re-openings that we're starting to see in some states.

MYLES UDLAND: Yeah, I think in a weird way we should make peace with the reality that the FAANG names, which continue to outperform, that's a defensive trade. I mean, these are companies that completely control the markets they're in. No one doubts Facebook's dominance, Amazon's dominance, Microsoft's dominance in many ways in several different markets, and so those are defensive names, and you know, I think about a couple of things playing in today's market action, but also the broader kind of arc of where we are.

You know, Cliff asked us at a great paper out on Friday, and he's looking at, you know, why value stocks are so cheap. What his analysis really surfaced is that the Fed names aren't expensive. They're not the names that are driving values depressed, you know, stance lower, right? It's because the value names are being left behind even more than they were during the last couple of bull runs in the tech bubble and the housing bubble. So I think with that as a tailwind maybe for a lot of investors who are just betting on the FAANG names saying, well, not going to get in trouble for doing this. I wonder how much that plays into it just as a psychological anchor for a lot of investors who are comfortable with kind of the crowding that's taking place in some of these big names.

AKIKO FUJITA: Yeah, Andy Serwer, I want to bring you into the conversation here. To Myles' point, and it seems like in some ways we're kind of back to where we were before all of this began. As you've pointed out, tech leading the way yet again. Apple up nearly 2% today. You know, this comes as it seems like investors aren't quite sure how to take these re-openings. On the one hand, it is good news that there are states that are resuming business, and yet we got news today here in New York that yes, they are starting to think about reopening, but it won't come until June. Mayor Bill de Blasio essentially saying, we're just not there yet. So it's sort of a bit of good news, and bad news, and maybe a reality check.

ANDY SERWER: Yeah, and yet, just another day for the greatest trade of your lifetime, Akiko, which is big US tech stocks. And you know, you said it's sort of like back to normal, back to what it used to be, and I'll just extend that into the stock market. It's true, except writ large. And you know, Myles made an excellent point. I mean, these stocks have not only become the bellwethers and the path forward for our economy, but they're safe too.

And if you kind of look and take a-- and think about it a little bit. You know, you can sort of group companies, which companies are going to really suffer, which companies are going to end up being OK, which companies are going to be just fine and maybe even better after all this, and you get to the FAANGs, PDQ. And if you look at these names right now, I mean, Amazon just crested 2,400, a stone's throw away from its 52 week high of 2,475. Microsoft, what, at 186. Just a stone's throw away from 190 with a $1.4 trillion market cap. And I don't know if this is going to end up being the wrong place to be, but right now, Akiko, it's the right place to be.

AKIKO FUJITA: Yeah, it certainly looks that way given at least the action we saw today. We want to just remind our viewers that we are awaiting a press conference out of the White House talking about testing or at least getting some kind of update on tests.