I wanted to end today's posts by paying homage to someone we lost this week, nine years ago: CNBC's Mark Haines.

CNBC's Mark Haines passed away on May 24, 2011. 

I still miss him. His death was a great loss to his family, friends and CNBC.

I probably guest hosted Squawk Box with Mark on over 35 to 45 occasions from 2003 to the time of his death (in those days guest hosts were allotted a full three hours).

Here is a column I wrote on the fifth anniversary of Mark's death -- check out the great video of the match race I had with him at The Meadowlands Racetrack(!):

It's just a box of rain,
I don't know who put it there.
Believe it if you need it,
Or leave it if you dare.

But it's just a box of rain,
Or a ribbon for your hair.
Such a long long time to be gone,
And a short time to be there.

-- The Grateful Dead, Box of Rain

My friend Mark Haines of CNBC passed away five years ago today, and it still stings.

I appeared via telephone on CNBC's Fast Money with Mel and the gang shortly after Mark's death and offered my teary-eyed thoughts , which I wanted to share with everyone again this morning.

Below is what I wrote about Mark upon his death five years ago:

"I have known Mark for about eight years, starting when I began to guest-host Squawk Box with him, Joe and David in 2003.

A lot has been said this morning on CNBC about Mark -- his broadcasting techniques and strengths, as well has his personal idiosyncrasies.

What I most remembered about Mark was his strength of broadcasting during a crisis -- whether it was a financial, geopolitical or social crisis.

But today, I will write about something this morning that most don't know -- his hobby was betting on thoroughbred horses. And for many years, he was proud to tell me that he had computerized the entire Hialeah Racetrack's meet.

His favorite page in the newspaper wasn't the business section. His favorite page was the racetrack entries at Aqueduct, Belmont, Saratoga, Gulfstream and Hialeah in the New York Post and Daily News. And, again, what few know, is that during commercial breaks he could be seen handicapping the horse races.

My fondest memory and funniest story about Mark Haines was about six years ago during a guest-host gig I had on Squawk Box. It was the week of the Hambletonian race at the Meadowlands racetrack (the harness-racing equivalent of the Kentucky Derby).

Two days before I was on Squawk, CNBC taped a match race between Mark and myself at The Meadowlands. Mark had never driven a standardbred, but he loved the racetrack and said to me, 'What the heck, I will take a shot.'

I had so much fun in that race. (I beat him by a nose!) And after we went over the finish line, I asked him did he have fun, too?

Mark's reply: 'Dougie, I would rather put a needle in my eye than do this again.'"

That was Mark -- ever so honest and truthful.

Here's a 2011 clip of Carl Quintanilla announcing Mark's death on CNBC.

R.I.P. my friend.

NONE

Thanks for reading my Diary today. I hope my missives were value added to your trading and investing processes.

Enjoy your evening. 

Be safe.

$3.6 billion to sell market on close.

A "squirrelly day" as I suggested earlier:

* Market breadth has been shrinking all afternoon (at 3pm less than 100 more advancers over decliners).
* Oil up a beaner to $23.72/barrel.
* Gold down small.
* Bond yields +2 basis points.
* (MSFT) and FAANG experiencing some strength - but not impressively so.
* (HPQ)  suffering in reaction to the EPS report. It was highlighted by the usual suspects as having unusually large "call activity" - another case of the volume spike being usual and not a tell.
* Banks giving back some as I cautioned this morning. morning.
* Semis downside leaders.

Recent sales of Goldman Sachs (GS) (-$5), ViacomCBS (VIAC) (-3%), and Twitter (TWTR) (-3%) looking reasonably good.

I am looking back at Apple (AAPL) , Caterpillar (CAT) and several other recent winners to short - but nothing down yet.

I am now loaded up for a bear.
I will have a lengthy position analysis/column on Monday morning.

Regular readers of my Diary know I sometimes post things that replicate the theme of the "Tell Me Something I Don't Know" segment on MSNBC's former show, "Hardball with Chris Matthews."
So ... "Tell me something I don't know, Dougie."

In only two months the percentage of stocks trading above their 50 day moving average has moved from 10% to 90%.
(This is probably not a good time to buy this overbought market.)

From my perch there is less than meets the eye in today's market advance.
In particular, the market breadth is barely (+200) positive.
I continue to fade the strength via Index shorts.

No trades since the morning.

Headed to lunch.

Peter on sentiment, valuations, China and Europe:

After seeing an extreme 'Euphoric' read in the Citi 'Panic/Euphoria' index as stated on Tuesday and and extended level of bullishness in yesterday's II figure, today's AAII sentiment gauge of individual investors saw a 4 pt rise in Bulls to 33.1 after last week's 5.7 pt increase. That's a 6 week high. Bears still outpace them though but less so as they fell 2.9 pts to 42.1, the lowest since March 5th. Bottom line, while I believe the AAII figure is the least helpful because it's so volatile week to week, the extreme bearish read we saw in early May has receded.

AAII BEARS

AAII BULLS

What's amazing about this equity market rally is that with the S&P 500 back to where it was in late October, the assumption at the time was earnings for 2019 were going to be about $165, the highest level ever. The estimate for 2020 was about $175. For the lost year of 2020 expectations are now instead $125 and throw a dart on 2021. It will certainly be higher than 2020 but with profit margins tightening, god knows where revenue will be and many stock buybacks on hold for a while, I'd argue that we are years away from getting back to $165 per share. This said, valuations mean nothing right now as the reopening of our economy is the only thing that matters it seems, along with all the Fed largesse. I was a lot more confident of an equity rally in March because I felt we were going to get our arms around covid. Now I'm not confident at all about where we go with these excessive valuations now in place.

China wasted no time in passing the new national security law for Hong Kong as another nail in the coffin of Hong Kong's independence is now in place. The vote was 2,878 to 1 for it. I wonder who that one person was. The question now is what is the global community's response, particularly the US. I'm sure it will first start with sanctions on certain Chinese officials. The special trading status of Hong Kong is more delicate because we don't want to hurt the people of Hong Kong. The Hang Seng closed down by .7% and the H share China index was off by .2%. After falling to the weakest level since last year, the offshore yuan is little changed as the PBOC engineered a stronger fixing to stem the weakness.

The Bank of Korea cut rates by 25 bps as expected to just .50% which is a record low for them. They also kept the door open for more policy steps "other than rates" if "deemed necessary." I guess they mean QE as money printing is now a global tool to what end I don't know with the level of debt so high already.

Of note in Europe was the economic confidence data. The main index for May rose slightly to 67.5 from 64.9 and that was 3 pts below the estimate. This printed 103.4 in February. Manufacturing remained deeply negative but 5 pts less so from April while services deteriorated further. Consumer confidence rose but off a very weak figure. Retail was up a hair while construction weakened again. Bottom line, with more and more things reopening, the June and July prints will be so much more relevant. The euro is little changed right at the $1.10 level. Sovereign bond yields are lower while stocks are mostly higher.

ECONOMIC CONFIDENCE

The projection for a possible stall in the equity rally looked almost "spot on" in much of the early trading on Wednesday. The Nasdaq, which had led the bulls for weeks sputtered in mild negative territory and the S&P seemed to be bumping against a recent high. But, in the afternoon, the Dow benefited from a resumption of production on certain Boeing lines and that gave the bulls another victory for the day.

Bulls took back control as shocks about China and concerns seemed to stay off center stage. The belief that the reopening economic rebound is more vigorous than thought continues yet to be questioned. China remains just off stage. Need to be watched.

Bulls clearly have the ball but need to run for open territory here.

Stay safe and wary.

Arthur

"I am going to write a good Diary on Real Money Pro today... and I am going to help people. Because I am good enough, I am smart enough and doggone it, people like me."

- Daily Affirmations with Dougie Kass

Today's Daily Affirmations is a general one and relates to those that attempt to time and forecast the markets:

There are a lot of pissed off investors around these days.

When you fail to capitalize on a 200-300 S&P handle increase it can be understandable. There are always outside events that can materially impact the markets.

But missing a 850 handle rise in the S&P Index should lead to a questioning of one's methodology.

I am not a licensed therapist, though.

"I deserve good things. I refuse to beat myself up. I am an attractive person. I am fun to be with".

I have moved back to between medium and large-sized net short in exposure.

This could be a day in which banks pause, by a small and non-actionable amount, and FAANG play a little "ketchup".
That said, I added to my (SPY) short in pre-market trading.

*A changing market complexion is not a good market tell or signal

There is not enough historical data to determine as to whether a meaningful pivot out of growth and into value could be seen as a bearish, or bullish, market factor.

According to my pal Tony Dwyer, the only two other times of reversal in such extreme outperformance of growth towards value produced two entirely different outcomes.

One was a peak and the start of a Bear Market in 2000, and the other was a month after the Generational Low in March 2009, and the start of a Bull Market.

Several weeks ago I highlighted the risks associated with heavily ETF weighted and "over owned" (MSFT) and FAANG and, by contrast, the investment opportunities in value.

As I wrote yesterday, how a money manager plays the great rotation and pivot out of growth and into value might be one of the most important determinants of investment performance in the months ahead:

May 27, 2020 ' 11:00 AM EDT DOUG KASS

Revenge of the Nerds... or Revenge of the Turds?

"Those nerds are a threat to our way of life."
- Stan Gable (Alpha Betas' fraternity star quarterback)

Revenge of the Nerds was a movie released in 1984 that chronicles a group of nerds (led by best friends and computer science majors, Lewis Skolnick and Gilbert Lowe) at the fictional Adams College who try to stop harassment by the jock fraternity, the Alpha Betas in addition to the sister sorority, Pi Delta Pi.

In the end of the movie, the nerd gets the girl (Betty)!

As I discussed throughout Tuesday's trading day, a profound move in value stocks erupted - overwhelming the lackluster performance from the growthy tech stocks ( (MSFT) and FAANG):

* I am Pivoting From Growth to Value
* A View of Financials and Tech
* This Is the Time
* A Timely Riposte
* The Pivot?

Whether or not this pivot is real will be an important factor in delivering superior investment performance and excess returns over the balance of the year.

My position has been taken and is manifested in my portfolio's structure (that is heavily weighed toward value and away from short growth) -- I believe in the revenge of the nerds... or, what some might say, the turds.

* Sometimes, in investing, its better to be lucky than smart
* Twitter shares are trading down in pre-market trading after the President threatens social media
* I hated to leave you but I really must say...

Goodnight, sweetheart, well it's time to go,
Goodnight, sweetheart, well it's time to go,
I hate to leave you, but I really must say,
Goodnight, sweetheart, goodnight.

Goodnight, sweetheart, well it's time to go,
Goodnight, sweetheart, well it's time to go,
I hate to leave you, but I really must say,
Goodnight, sweetheart, goodnight.

- Sha Na Na,Goodnight Sweetheart 

The President has threatened to retaliate against Twitter (TWTR) and all of social media for the fact checking initiatives instituted by Twitter this week:

Sometimes it is better to be lucky than smart as, over the last two days, I have liquidated my long standing position in Twitter. I wrote yesterday:

May 27, 2020 ' 02:15 PM EDT DOUG KASS

Goodbye to My Little Blue Bird* I have sold the balance of my Twitter holdingsI continue to whittle down my long book after the "rip your face rally" over the last two months.Towards that end I earlier sold my entire Goldman Sachs (GS) position. Yesterday I halved my Twitter (TWTR) holdings (after a run from $20 to $34) and I have just sold the balance of my Twitter for a sizable gain.As mentioned earlier, Twitter is in the vortex of a possible continued pivot from growth to value.Though still a unique and valuable asset, I have an inkling that the fact checking based fight between President Trump and the company has just started. If the conflict becomes really bad, it might be sub optimal for the shares and render a M&A event as more unlikely, especially in the face of a plethora of economic uncertainties (advertising, etc.) over the balance of the year, the proximity to the November election, and the growing lack of political appetite or acceptance of a potential deal (from both Republicans and Democrats). What could also be a considerable headwind for the shares (and fundamentals) would be if the national polls begin to favor Biden over Trump - which I believe is a distinct possibility. In the extreme, a Biden victory could reverse the company's recently improving usage metric growth, given how important Trump's tweets are for the franchise. I would be a $27 buyer on weakness.The Medium Is The Message
The conflict between Trump and the social media companies is another reason to lay claim that the recent pivot from growth to value could continue.
Though stock futures are mostly higher, shares of FAANG are all lower in pre-market trading.

Danielle DiMartino Booth on volatility and jobs:

• As reflected in the Fed's Beige Book, the CARES Act's $600 weekly UI supplement has caused many to refuse to return to the workforce as it will be an effective pay cut; a University of Chicago study found 68% of jobless workers are making more by collecting UI
• As the economy reopens, businesses will be challenged to lure the unemployed off the sidelines; the Philly Fed's take was emblematic of the country as a whole with 29% of firms noting expanded unemployment benefits are an impediment to recalling workers
• Until recently, the VIX has been a leading indicator for jobless claims; a rise in Google searches for "permanent closing" and an arrest in the declining ranks of those searching for "unemployment insurance" suggest volatility is dormant but not dead

The origin of the phrase "Couch Potato" dates to the 1970s. It alludes to the image of a motionless vegetable watching television -- or a person in the shape of a potato lounging with a remote control noshing on a wide variety of starchy junk foods. (Seen any of those on your sofa lately?) The expression also may have derived from the slang term for television watcher, as in a "boob tuber." In the event you've never visited the Gem State, the potato capital of the world, the root that produces the manna of French fries and kettle cooked chips is also called a tuber.

But nowhere in the history of the Couch Potato does it refer to said sloth as being unemployed (though the stereotype has been more than fulfilled with the average American having gained five pounds in voluntary quarantine). Dash the thought -- but what if there was a large enough carrot or enticement to stay on the couch, to stay unemployed? Yesterday's Federal Reserve Beige Book revealed such an incentive does exist. And it's pervasive. The following are excerpts from ten of the twelve Fed District Banks (bolding and underlining ours):

• Boston: "A majority of contacts noted that for some people, unemployment benefits could outweigh a salary, providing less incentive to find a job."
• New York: "...many unemployed workers reluctant to return to work - some attributed this to generous unemployment benefits..."
• Philadelphia: "When asked about impediments to recalling workers...overcoming the lure of expanded unemployment benefits was noted by 29 percent of the firms."
• Cleveland: "Multiple contacts in a variety of industries noted additional labor market challenges, including...unemployment benefits that disincentivized workers from rejoining payrolls..."
• Richmond: "Others expressed difficulties retaining or rehiring workers...because it was more financially beneficial to collect unemployment insurance."
• Atlanta: "Several employers noted concern that the generosity of unemployment benefits may make it difficult to attract workers once demand improves especially among lower paid jobs."
• Chicago: "...generous unemployment benefits were making it difficult to bring payrolls back to necessary levels."
• Louis: "Contacts reported that reopening firms were limited by labor shortages, which they ascribed to increased unemployment benefits."
• Dallas: "Firms that were beginning to call workers back said that...generous unemployment insurance (UI) benefits were preventing some workers from returning. A few staffing firms noted difficulty recruiting due to increased UI benefits."
• San Francisco: "...contacts noted that some workers' current ability to receive more income through unemployment insurance and other social programs than through employment has hindered employee retention and rehiring efforts."

John McEnroe's classic comes to mind right about now: "You cannot be serious!" Let's calm down and think this through as if we are a small business owner or a hiring manager. If your employees were earning more on unemployment and didn't want to return to work, would you bring them back after a temporary layoff? That brings us to today's chart, derived via the rich store of Big Data.

Google Trends indicates that searches for the phrase "temporary layoff" (green line) peaked on March 23. It's no coincidence this was the same day the Fed bailed out the markets. Since then, search interest has fallen back to pre-COVID levels. As the economy reopens, the temporary layoff wave is receding.

But what of those who've effectively gotten a fat raise? "We need you back at work. No thanks, I'm being paid more to stay on the couch." The University of Chicago piece making the rounds is an eye-opener and postulates that 68% of jobless workers will collect more in take-home pay with unemployment insurance plus the federal government's $600 weekly sweetener. A classic happy ending for all involved? Afraid we're filing these workers as likely permanent job losers.

Tellingly, the Beige Book also found some anecdotal evidence of firms raising wages to entice workers to get off the the couch. But not all firms will be able to pay up to return their workforce to full strength. That sadder fate is depicted on the blue line.

Google searches for the phrase "permanently closing" have been trending since the calendar turned to May. As detailed in the Weekly Quill, retailers and restaurants' demise have been expedited by the coronavirus. And there's more to come as June 30 approaches, the expiration date on Paycheck Protection Program recipients' commitment to keep covered workers on the payroll.

Until recently, the VIX has acted like a leading indicator for initial jobless claims, rising before the spike and continually falling...until recently. Today, claims are expected to "edge lower" to 2.1 million and every economist in the Bloomberg survey is calling for a decline from the prior week's 2.438 million.

Even a Couch Potato could tell you that the bias in the sample will be tested, especially since Google searches for "unemployment benefits," which lead claims, have also stopped falling. Maybe it's time to go long equity vol?