Federal reserve. And people dont see this, i dont think, as a major, major shift in terms of what the fed will do. Just it is losing a key academic and experienced and wise voice on the federal reserve, but there are a lot of economists and noneconomists out there that President Trump can now choose from. And this fischer wasconsidered more of a democrat choice. And, in fact, i remember when the big fed decision came due for president obama, it was between Larry Summers and janet yellen and one of the dark horses was actually stan fischer himself, he was not willing to give up his citizenship to israel, but he was considered once the giant of central banking, still is still may make his policies known, even if hes not the vice chairman of the federal reserve. But as far as any policy implications, i wouldnt expect anything to change hes been at a number of meetings over the last two years and made his voice very clear. Im sure a lot of folks from the board will continue to heed his advice interestingly, sara, he does leave on october 13th, that would be two days before he turns 74 his birthday being october 15th. So we thank you for your insight. We look forward to having you back onset but if you are just joining us this morning, stan fischer, vice chairman of the fed resigning in midoctober for personal reasons. The market has not moved a lot im Carl Quintanilla well take stock of the fischer news and all the other news. Dan morgan is the Senior Vice President and Portfolio Manager and david is a Global Market strategist guys, busy morning just on fischer, takeaway for investors that you can think of . Its too soon to price this into any future trading action i think that were obviously losing a known quantity that removes something that we can build expectations around from the fed board, but i dont think its worth extending this into anything broader i think it is worth waiting to sit tight. There are obviously a number of fed decisions coming over the next couple of months to Pay Attention to dan, given what the president has said about being a low Interest Rate person and the direction the fed has taken, does this have more perhaps to do with deregulation does it matter from the market standpoint when you look at what stocks are expected to do . Well, i think its somewhat of a positive. Hes going to replace somebody on the board with his, be more in tune with his policies. You mentioned deregulation, i dont think it changes consensus in terms of fed funds. Youre still looking at a 25point basis point increase. Construed it somewhat as a positive because youll have somebody more in line with trump policy on the federal reserve. But thats going to happen no matter what. And thats going to happen a handful of months. To me the question is over the next couple of months, if you understand sort of the internal dynamics inside the room, hes a powerful voice, he wrangles a lot of people for yellen i mean, if you really understand sort of the power dynamic, hes one of the sort of behindthescenes wrank leglers. Do they come at a different voice . Does it impact, even if they are going to follow yellen, does it change the dynamic in any way . You make a good point that yellen is losing a key supporter and we are losing an academic of the fed board. A lot of the concern looking forward to 2018 and what that holds is what is the internal composition of the fed looking like as i said earlier, a fairly wellknown quantity back to bernanke we can expect what the fed is going to do. Theres a perpetual dubbish tilt that could change. We are not going to change our forecast yet we are still pricing in one rate hike before the end of this year and two rate hikes next year but obviously when the rules of the game change, you need to adapt to the new environment. Are you betting, by the way, that gary cohen is the next fed chairman or who is your horse . So i actually think that yellen is going to stay on as fed chair. Going to stay yes, i do shell get reappointed and it will be very difficult to implement any of the fiscal policy options that have been laid out in front of us with Interest Rates moving noticeably higher. That would be for much of the market to be ready im not sure the market is mentally prepared for that outcome. It could be a surprise, right . It would be a surprise. Thats definitely a less than consensus view but it is rare that we see the two working in concert a bit Going Forward. When you think about it, i mean, you tell me, gary cohen, if he was going to be the next fed chair, would likely have to be relatively dubbish too, right . I dont think theres a risk of going from massively dubbish to massively hawkish the unemployment should continue to come down we are expecting a little bit of wage growth Going Forward and that keeps the fed on track to stabilize monetary policy. We are not betting on big shifts based on who the runners are currently. Dan, as you look out at say big tech stocks for the rest of the year, you say overall you expect this news to be a positive therefore, you look at the as n nasd nasdaq, a lot of people nervous about it, you think that continues to hold up based on apple announcements and equipment excitement yeah, john. I think you still have leg swift in the tech story. So far, Second Quarter numbers in terms of profits on the s p 500 were up about 11 . Tech was up 19 . You look at it up year to date over the overall market. And you look at the as in dax, we still have legs to the story. We have not only strength like you mentioned in semiconductors but with the release of these phones coming out, we have the anniversary phone next week. More emphasis late september to early october. You have iphone 8. So you have all the stories breaking out, coming out, increasing excitement. Not only on apple but the semiconductors and the guys in the feeder chain related to that release. So very positive on tech and looking for good things down the road the economy is good. So theres really no reason to change outlook at this point now, september and october are going to be chalk full of news we know that, guys appreciate that and swift reaction to the fischer news the president is meeting with congressional members at the white house to talk about tax reform and Immigration Reform well hear from the president at any moment in the meantime, eamon javers is at the white house where we caught up to Kellyanne Conway. Reporter good morning. I had a chance to get up to speed on the tim cook tweet that said 150 workers at apple are dreamers and he stands by them i asked what the white house thinks that apple should do with the employees . Should they begin to fire them in six months . She said, thats up to apple what to do with their personnel. Weapon dmon we dont meddle in personnel issues in any Corporation Private or public. I asked about the tweet earl earlier from the president who said, will be going to north dakota to discuss tax reform and tax cuts we are the highest taxed nation in the world that will change. And kellyanne responded to that. She said the president was probably talking in a tweet this morning about the corporate rates, not the overall tax picture in the United States well wait for some developments from that 11 00 meeting, which should be underway here at the white house, carl. Well come back to you in a little bit, eamon. Thank you very much, outside the white house. Switching gears, youtube is expanding the original content to surpass last years 27 original series. For more on youtubes content, we are joined by the chief Business Officer at youtube, hes out with a new book stream punks youtube and the rebels remaking media. Its a pleasure to have you post nine, albeit a busy morning. Welcome. Thank you, carl pleasure to be here. Just when you thought the competition in the space couldnt get more intense it does walk us through why the number of the new series are so important. Oh, i think were finding ourselves in the golden age of video where you have the entire ecosystem pumping out more content than ever. On top of it is the online video host emerging rapidly with all the large platforms being in video. And all of us are tweeting a tremendous amount of content coming out so it is truly the best possible time to be somebody who loves video because you have more choices than ever. We were talking this morning before the show about in the old days, it was the studio, the old line studios who would fight over talent, pay more for actors, contracts, now its essentially Tech Companies doing that at what point does that get expensive . Well, it is everyone doing that in today. But what we talked about in our book extreme punks, theres a new class of oritors rising on youtube and getting tremendous audiences, millions of people all around the world and they are building basically empires both online and offline. And the most important point is this is not just for young people, but it is for people of all ages and theres a great story of a lady called jenny done who has built an empire on quilting through youtube. When you think about the premium Subscription Services, how many do you think an individual family, the average individual family will ultimately subscribe to . Its hard to prognosticate on that, but i think it is several. People love content and they go to what they like. They dont mind paying for multiple services. I think people have music Subscription Services, they have video Subscription Services, several of each. And you each have a different feel, meaning how do you define youtube, whatever you think that represents versus what you think hbo may represent, which over netflix or amazon prime or showtime, this is where it gets complicated. Because you have all the great content, but does each one have its own brand anymore . I love this question because you said the word confusing, i think it is very confusing because everybody is in video today. And the other part of the question is how we are different. The difference for youtube from the rest of the platforms is that were an open platform. Where anyone can have a voice, which is brought out unexpected surprises. And the people who are building the massive audiences and followings on youtube that we describe in the book are the ones building incredible loyal followin followings and they all want to do bigger and more expensive programming, which is what we do with them for our own Subscription Services called youtube brand. We are leading into the people who built large audiences and doing tremendous things with them. So james cordells car singing became this phenomenon and apple comes in to buy a piece of the franchise is that okay with you . Thats absolutely fine because we have james corden in our show on youtube and have him globally while it came out on apple, its gotten bigger on youtube so its this is my point that this is all just wonderful for users. Because they are getting access to more content than ever. And all we focus on is to make sure our users are really satisfied, they are engaged a lot with the content, that the streams that we describe in the books are producing for them and that sets us apart from all the other platforms. Can you build a netflix parallel within youtube while still being this big tent with all the users . For some reason, mentioning on the earnings calls, how many more users youtube has than netflix, but theyve really got the subscription business. Are you able to do both . We are not trying to do that. We are not trying to copy netflix. We are who we are. We are really comfortable with our identity as the open platform and our Subscription Service is about offering more choice, more c content for the users and more highdollar for the users. But we are anchoring off the people who have become huge on youtube, the street punks describe in the book, and produce high level programming without our money and promotion. Live sports, when did it really happen . When is the Tipping Point . That is a very dangerous prediction i think youre starting to see some cracks in it today, but i think watching live from broadcast tv, it will take many years for that to unfold and you may see a lot of collaborations between broadcast tv and Online Platforms as well. So that in itself is a messy space as well and just something to keep a close eye on for the next few years. The evolution of the advertisement is getting interesting, people now talk about six seconds of something tolerable. I will sit through 30 seconds on youtube. And i wonder, if you have found that the initial ad in front, the preroll, is the most effective tool you have right now . I love that youre aware of this and love thank you for watching our ads because they pay for all the amazing shows. A lot of the ads are skippable so were in the business of limiting the friction for the users, so skip the advertising, that generates revenue sometimes you can skip and sometimes you cant. How does that happen it depends on the advertiser choice. And how much is it the price theyre paying there are all kinds of different schemes for that what were trying to do is deliver on the thousands of objections, reach, target, whatever objections they have in order to increase their brand, sell their product, ship cases, ets et cetera. So they choose different ads and the most recent is the sixsecond ad that is getting embraced quickly and expanding tremendously and even more recently we have seen fox embrace that themselves so they have been on the forefront of that with us. Might be part of it. Changing advertising is really happening. We did get cautionary comments from wpp about softness in advertising, softness in packaged goods advertising has that been reflected where you are . Not for us. Look, we are focusing on making sure that we engage users as much as possible, which is what we do with all the great creators that we talked about in the book and that we provide lots of frictionless advertising for them that delivers from the advertisers objections when we do these things, were fine and the business is going really well so were really excited about the fact that we are giving birth to a whole new set of storytelling and storytellers who built large global audiences on the average 60 of people have revenue come from outside the country. So we are an export business and then that it is actually not just for kids but also for people of all ages. You keep mentioning creators, books about creators, you dropped it many times here, youre not talking about the algorithm. Has the competition shifted more to getting the creators and getting them more committed to your platform versus others . Is that where the game really is now . I think everybody focuses on creators and on the creative community. We have been doing that for the last ten years i think they tried to be fair, but its a really difficult thing to do at large scale so this is something that would happen for a very long time. We have tens of millions of partners on youtube. And we foster that community we share a majority of the revenue with them to make sure they can sustain their businesses and growth. And many have grown and tremendous empires both on youtube and off youtube. And we want to make sure that its not just young people, but it is people of all ages with many great examples. Yes,s the about the focus on the creator to make sure they grow their businesses. We have been talking for many minutes and we have yet to mention the fword, facebook where does facebook when you wake up in the morning and think of your competition, we keep talking about netflix, assuming you must be thinking about what facebook is doing. If youre an Internet Company and you were born one click away from your competition, so that is like fact number one. Number two, it is what i said before, because we focus on users first and foremost and have to know the strategy, focus on that, but be mindful of competition. You cant be focused on them so much that it is your strategy because you would change the strategy every single month. Im going to stop you there as we get to the president thank you for coming in. Please come back thank you so much author of stream punks. Well get to the president talking about the Hurricane Irma. Thank you very much we have the congressional leaders here today and have a lot to discuss including the fact that theres a new and seems to be recordbreaking hurricane head right to florida and puerto rico and other places well see what happens well know in a very short period of time but it looks like it could be something that will be not good, believe me, not good we have many, many things on the plate. Hopefully we can solve them in a rational way and maybe we wont be able to, well probably know pretty much at the end of this meeting or the meetings that well be having over a short period of time but our country has a lot of great assets and we have some liabilities we have to work out. So well see if we can do that i appreciate everybody being here thank you very much. Thank you very much, nancy, appreciate it very much. Jud, appreciate it very much thank you. Thank you. Thank you very much. Thanks, guys well see. Reporter President Trump [ inaudible i hope they do. I certainly hope they do thank you very much. That is the president meeting with congressional leaders a few moments ago. Of course, in advance of his trip to north dakota to promote tax reform his first trip to north dakota after visiting missouri to talk tax reform last week 23rd state hell visit, the fifth west of the mississippi. Of course, a lot of the white house minds on Hurricane Irma as the president knows his property maralago is in the potential path of the storm. Which judging from the pictures in the leeward islands, looks very severe. Eamon javers is watching this outside the white house. Reporter you saw the reporters trying to get in as many questions as they could there. A couple things to bring to your attention, the president was asked about a shortterm debt ceiling increase with ties to harvey funding he said, well see he was also asked there whether or not he had any second thoughts about daca and his decision yesterday he said, no second thoughts, no second thoughts there. Thats interesting because there was some sense last night when the president tweeted out he might revisit the daca issue that is on the dreamers in six months, there was some sense that maybe the president had some regret about the way his decision was playing but today, saying no second thoughts at all on that, carl. All right eamon javers, any clues on what the message is on text reform . Some are saying this is a sign that there might be a bit of a moderate consensus forming on this policy . Yeah, obviously they are targeting heidi hikamp and Kellyanne Conway said to remember how big the president s win was in that state. Thats how popular he is in a state where democrats have gotten elected they hope the president s coat tails can pull across a couple democrats on tax reform. But this is a very polarized and partisan town. Well see if one ride on air force one can change things. But this is an example of the president out there doing retail politics that some folks in washington crediticized him for not doing on Health Care Issues earlier in the year. This is what the president s do they get rides on air force one and try to get the vote. Eamon, any new evidence that there is a meaningful tax plan that they are talking about beyond the race, just broadly speak, and i dont know if you saw the van wyck piece in politico, but nobody else including the people in the white house are with him we have Kellyanne Conway that we asked about that, too what is the president s ideal Corporate Tax rate today hes targeting 15 its clear from the rhetoric at the white house they admit theres a possibility, they are not going to get to 15 , but that is a negotiation up on capitol hill no specifics, though, here ultimately on what in the president s tax plan we saw. Officials came out last week and said they do have a detailed plan Steven Mnuchin said that the plan has been refined among the socalled big six negotiators, but the white house has not released the plan yet. They are socializing it on capitol hill at some point, with all tax battles, the devil is in the e the tails, whether there are more Interest Groups on capitol hill frustrated by what they lose and Interest Groups happy by what they gain in the deep details, paragraph 7, subsection 6, that matters in tax policy. Whether you line up the winners and losers, you can pass a bill. That is going to be the story over the next few weeks and months eamon javers, thank you. The dow is recovering a little bit up to 65 the tenyear is closer to 206 and 207. Back in a minute and can help protect your potential profits. Fidelity where smarter investors will always be. Hey, im the internet i know a bunch of people who would love that. The internet loves what youre doing. So build a better website in under an hour with. Gocentral from godaddy. The internet is waiting. Start for free today at godaddy. Wherwhere we always welcome you, thats texas. Exas. Where we always find a way, thats texas. Meantime, it is being called the most powerful atlantic storm in more than a century. Hurricane irma bearing down on puerto rico in the u. S. Virgin islands. Wmaq meteorologist kalee dionne is tracking the storm. It continues to barrel off to the caribbean. So the updated National Hurricane track has moved just slightly to the east along with several of the model runs moving the track farther to the east. Still keep an eye on this because either way, we talked about how large this storm is, its 400 miles wide in diameter. So either way, as we move forward over the course over the next day or two, please prepare, how do you prepare there are several things you can do ahead of time, whether on the east coast of florida, whether on the west coast of florida or whether you are up into the carolinas and even georgia all of you need to start doing that so you can go ahead and get your personal information, make copies of those. You can also go ahead, if we can pull up some of that, firstaid kits, medicines, and you want to make sure you have a change of clothes, especially getting into the car to get stranded. Flashlights and batteries. Also make sure to have cash on hand you can do all this now to make sure you are prepared when the storm makes landfall going into the late weekend and early next week kalee, thank you very much. Good advice for those, especially in florida right now. Meantime, the president meets with congressional leadership with the white house today tax reform, budget and Hurricane Relief are among the topics being discussed. Joining us post nine is jay simmons, the president and ceo of national manufacturers. Great to have you onset. Great to be here. We have two big things that we want to get through this door or more. But for the time being, its tax reform and now Immigration Reform do you have a sense of which should go first . Look, i think that congress can walk and chew gum at the same time. I think they can move both issues down the track, get things done. You have people that are elected to actually improve this country. And those two issues are pretty important. And the track record since january encourages you well, it hasnt been great. They have the ability, they have the capability of doing it one Party Controls all branches of government. This is the time this is the opportunity to do exactly what they need to do on Immigration Reform, on tax reform, on Regulatory Reform and also infrastructure. All that is not going to get done in the next four months, but we can certainly get some things started and some things completed. Tax reform would be at the top of the list. Youre saying tax reform is at the top, what is the National Association of manufacturers message about daca, about what should happen to these undocumented immigrants who came here as children well, look, the dreamers are not the problem. Immigration is absolutely broken in this country. Theres no question about that congress and previous administrations have missed many opportunities to fix the problem by their inaction. Now is the time to step up and do it. This was not something that we actually wanted to see happen, obviously we didnt want to see this happen. There are 800,000 young people, meaning the repeal of daca theres 800,000 of young people who know no country other than america who have contributed to this country and have the opportunity to contribute in the future were very hopeful Congress Finds a pathway to them being able to stay here and be a part of the american dream. We keep going around and around on what is the Corporate Tax rate and what it could realistically look like. The president said 15 . We have been advocating 15 . We also want to make sure that passthrough entities are not left behind. That they have a similar competitive tax rate territorial system and reup search and Development Tax credit and expensing as well. Have you done math to suggest that you can pay for it . Well, it depends on what you mean by pay for it right . Are we going to increase is the savings inadequate yes, youre going to increase the deficit shortterm but what is the goal the goal said today at the new york city chair club that the goal is growth in economy. We cant keep up with the 2 growth rate. If we do that, we will never add to the coffers of the u. S. Government to be able to spend the resources necessary on the programs that are important. How many years out do you get to im not an economist,but obviously the faster you grow youre advocating a rate, youre seeing a shortterm hit, not a longterm hit. Im trying to understand, if youre going to come on to advocate that, what would suggest that on a longterm basis, you get to the Promised Land i think that is fair. The math we do show says we could add 12 trillion to the economy over the next ten years if we have a corporate rate of 15 . We also show that there would be 3. 5 trillion of investment in this country and an additional 6. 5 million jobs on top of the current projections. All that adds to revenue into the treasury and that is the ultimate goal. We. We didnt get the trade or the infrastructure today. We like trade, we like infrastructure, how is that . The room is extremely crowded. Jay tim montmons, thank you very much we are less than a week away from delivering out to happen on september 12th you can be there live. For more details, go to deliveringalpha. Com. A huge roster of speakers coming up next tuesday. Were back in a moment not rebalancing your portfolio. Pursuing your passion, not reacting to market downturns. Focused on what you love, not how your money will last through retirement. Let us help you with those decisions, and get on with your life. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Good morning, everyone im sue herera Hurricane Irma making landfall in the northeast caribbean earlier this morning churning along a path to puerto rico, the dominican republic, haiti and cuba before possibly heading for florida over the weekend it is the most powerful Atlantic Ocean hurricane ever recorded with winds hitting 185 Miles Per Hour new jersey senator bob menendez arriving in court for the beginning of his corruption trial. Hes accused of lobbying for a florida ophthalmologist in exchange for political donations and gifts. Me mendez denies the allegations. More than 1. 5 million chests of drawers are being rauld afec after a report of a 4yearold tipping one over this was sold in six colors at walmart and other retailers nationwide and German Police are investigating who threw two tomatoes at chancellor merkel during an Election Campaign event in hidelburg one glanced off her hip and the other slightly spattered the moderator next to her. She reacted calmly offering the moderator a tissue shes hard to break. Thats the news update at this hour back downtown to squawk alley. Carl, back to you. Thank you, sue well go to seema moody with the european close here. The european stocks are mixed ahead of tomorrows meeting. Among the top reformers, despite the unexpected decline in factory orders for july, tomorrow markets will be joining to see if the president mario draghi will be making comments to buy down the program and the stronger euro. This rally in the Euro Currency is complicating matters for the European Central bank amid concerns that the currency strengthens imports and dampens inflation, which is still below a target of 2 Capital Economics says words will only have a temporary effect on the Exchange Rate unless they are accompanied by action Deutsche BankCeo John Cryan is among those pressuring to end stimulus today he said, the cheap era of money in europe should come to an end despite the strong euro more rates have profitability at the euro banks but take a look at Deutsche Bank down 13 year to date. Though shares are higher in todays trade. Meantime, microfocus is a bigger gain on the ftse 100 to bring results from the Stock Company they bought from hewlettpackard enterprise up 6 the analysts will finish with a look at the stoxx 600 insurance. After worries of Hurricane Irma, there are some sectors seeing losses gentlemen, back to you thank you. Meg whitman is joining us phone nine this morning to talk about the companys most recent quarter but also her being talked about as a successor, potentially to travis kaepernick at uber. Thank you, carl we had meg whitman on as we do every quarter. The numbers were not bad i mean, continued price competition, deram pricing, but costcutting and seeing Revenue Growth but the key question we have for miss whitman involved her potentially offagain and onagain candidacy for the top job at uber. Late july after some leakingness, her words from the board of uber, indicated she might be a candidate she said, no, im not, on twitter only to be followed by clearly being involved in the process. Heres what she had to say i was not a candidate until that friday night before the board met in San Francisco when i got a call from a board member friday night that said were not settled on a finalist here would you reconsider and what would it take . At that point, i said, its a familiar business to me. Its a twosided marketplace its disruptive and has characteristics of ebay in the early days so i sat down and said, here is what its going to take for, any ceo to be successful weve got to settle the lawsuits between various fractions on the board. Things have to take place in the board meeting, not outside the board meeting, and there has to be certain governance in place they were interest in that but ultimately it was not the right thing. They did not succeed to the conditions to take the top job i did ask, what is the reaction from the board given it would seem their ceo certainly had interest in leaving the company to take another job . You should not be concerned a about this ive had a discussion with the board. Im sure you have. I said, listen, i wasnt a candidate until friday night but now im here im here and going to continue to see this through. Because weve made a lot of progress and theres more progress to be made six years in that job, carl once a 350,000 company unit. She did point out total share return for the first time ive ever heard her say what do you think the timeline is for seeing it through for her . I dont know. I dont know i asked her if five more years was possible, i cant imagine five, right . But certainly not enough so far. Yeah. Right. Its already been six. And its been a hard six years i dont know what you do if you are a board member clearly, she said she spoke to them, but youve got to start thinking about a replacement candidate, dont you is there a successor . Im ignorant, i dont know enough. Not that im aware of at this point. Yeah. Its time for the cfo to take a significant role in the company. It was good to have her thank you, steven. As we go to break, take a look at shares of kohls moving north with amazonbranded devices in echoes and fire tablets in ten stores in los angeles and chicago starting next month shares are up better than 5 the dow is up 62 dont go away. Whoooo. Youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if. There was a single site. Where you could find the. Right hotel for you at the best price . There is. Because tripadvisor now compares. Prices from over 200 booking. Sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. Coming up today on the halftime report, it could be the indication of whether stocks rise ahead and where apple stocks could go next well debate which analyst could be right and which trader is about to bail on tech. But where could he put the money . That could surprise you. And well get the updated path for Hurricane Irma closing in on florida. Halftime report at the top of the hour andrew, see you in a bit the big news happened in the past hour. The fed chairman mr. Fischer is resigning in midoctober what do you make of this and does it matter the markets are not moving yet. Well, i dont think necessarily its going to affect the market i think a lot of investors really like having Stanley Fischer on the board they feel like he was the mentor to many of those who were on the board. But, at the same time, they believe a lot of people expect to have a shift in the makeup of the omc coming on what is based on what the president said he was almost a perma hawk since he came back and was on the fed vice chairman. You always thought of Stanley Fischer, this is the guy to give the most hawkish statement and generally speaking, that was it so all of a sudden it would appear to be that it opened the slot for the possibility of somebody who could be thats what i was going to ask. Is there a name and with a particular view that you think is going to become more powerful in the next few months before and if its a little bit sudden soon after the actual occurrence for me to think of a name in here, but i would have to think that the administration, the one thing that would likely change is just the way the administration has significantly changed in the Supreme Court it has a chance for a much shorter term to change the federal reserve. Weve been asking the question all morning, who is your horse meaning who are you betting on come february . I am hoping that the president will keep janet yellen i dont like to change horses in the middle of the stream, andrew interesting, we had some viewers write in to say, you mentioned his hawkishness, some viewers argued that him leaving allows yellen to more openly embrace the idea of structural deflation, right and to build on these things and technology and areas that are permanently affecting how prices move do you think thats too much well, i think it is also going to now with the fomc being more dubbish in its tone, that we probably are going to be writing off the possibility of another rate hike this year because the expectation is were going to be seeing course cpi up by still less than 2 for all of 2018 so theres not really the incentive for the fed to be raising rates aggressively. So jon, say we dont get another rate hike later this year, youve got the markets that seem to shrug off all kinds of bad news. How should investors think about q4, which is coming up in just a couple weeks, and how they should shift their position . Well, my thought is to stick with what we have been suggesting, which is cyclicals over defenses. And have an eye for midcaps and small caps to perform better as we likely get, i dont think well get tax reform, but i think it will be called tax reform but it will be a tax cut. But i think it will be good for smalls and mids. But i would stay promarket on this are either of you factoring in any way, shape or form north korea into your thinking oh, most certainly. Yeah, the problem is, how do you model in a rational market response to an irrational despite . It is a concern that we keep looking over our shoulder, but as we have seen with the market military sendoffs, you end up breaking even in fewer than three weeks. And andrew, the other thing is, if we go back to the 1950s and the 1960s, we had real Nuclear Enemies on the other side china and russia, which were much more sophisticated relative to the time in terms of science, the north korea is today with their weaponry john, sam, thank you for your perspectives this morning. When we come back, shares of Palo Alto Networks have been up for the past six months. Well speak to the companys ceo when squawk alley returns. Take a look at shares of Palo Alto Networks the stock is up nearly 20 lets take a closer look at where the Growth Opportunities are in the security space. Joining us now, Mark Mclaughlin from Palo Alto Networks. Thanks for having me. So one of the areas that youre looking at, Machine Learning, Artificial Intelligence sghuecurity space. What can you do to have an edge over all of the other companies, practically everybody in the valleys these days talking about ai ai is very important in what were doing as one of the largest security providers in the industry and growing much faster than all the competition is taking all the data and telemetry. Weve had over 40,000 plus customers. We added almost 3,000 new customers in the quarter so a lot of data coming off of that, applying Machine Learning and Artificial Intelligence to that to give proactive answers to be better at security and weve opened up that data link now to other companies, innovators, our customers and competitions to write applications into the data so this will completely disrupt the entire consumption model in security so you dont have to deploy new stuff in order to use al go lit thu rhythms sis companies of the world will say we have more data or is it having right teachers . Rhythms sis companies of the world will say we have more data or is it having right teachers and where is your advantage . We have to have three things. First thing is you need sensors to get the data. Second thing is you actually have to be able to ingest the data and third, you have to apply the ai Machine Learning to it. So our advantage on that is were extremely widely deployed, Fastest Growing company in this business by far, almost the biggest company, soon to be i think the Largest Company in security and so were getting widely deployed so you have to be deployed in the first place to collect the data and were in a good thinks on that. And then using the Machine Learning on top of it. Thinks on that. And then using the Machine Learning on top of it. We have an advantage there as well so you need all three things to do Something Interesting like were doing. Over the past few quarters, you had issues with your sales force but analysts feel like youve gont there. What kind changes do you need to make in your sales force, how they are approaching customers sure. I often get asked what is the biggest thing you worry about and i say when youre as big as we are, multi billion dollar business growing at 28 revenue in the last quarter we just reported, execution really matters. And were not always going to get everything right in the first half of our fiscal 17 we did have some issues that we created ourselves in our sales force, but most of that is behind us now and as you can see from the results, we feel good about the progress weve made. A lot of the bigger company, many partly consumer facing, apple, amazon, microsoft speaking out on immigration among other political issues recently, how much does that touch your business and how vocal does Palo Alto Networks need to be when we think about all those issues which are really important, we think about it from a business perspective and also personal perspective as well and were a company that really values inclusiveness and our on business defepends on it and we care deeply about those issues and we are involved in many forms. And for our country im sure. Mark, thanks so much for joining us thank you for having me jacqusquawk alley back ri after this and at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. Youre searching for something. Whoooo. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if. There was a single site. Where you could find the. 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Exas. Where we always find a way, thats texas. Nissan has some competition for teslas model 3. Phil lebeau is tracking that story in chicago we dont talk about the nissan leaf a whole lot, but it is the best selling electric vehicle in the entire world and with that in mind, nissan unveiled a new version of the leaf, they did this last night in las vegas here it is, the new nissan leaf, its increased its range and now gets over 150 miles per full charge its been redesigned for the First Time Since 2010. But one of the key selling poichtds here will be the price point. The fact that the nissan leaf will sell at list at the base under 30,000, that is below the model 3 as well as chevy bolt. And when we had a chance to talk this morning with the chairman of nissan north america, he believes that price point will help the leaf connect with more buyers within the market, we are a growing significantly despite the fact that we have the vehicle in the market for more than 6 years more than 20 . Solt numb so the numbers speak by themselves well see what the leaf has to do in terms of generating greater interest in electric vehicles which overall have had overwhelming appeal for buyers here in north america. Back to you. Phil lebeau, thank you. Interestingly, tesla is down just a touch in what is not a terrible tape. Well see if it has anything to do with Competitive Pressures from the nissan or others. One thing about this storm on though and we continue to watch the track, how it will affect cars, used card pric prices andd car sales. The big question is whether irma makes that turn to the right sooner or later. The sooner it does, the better chance florida stands. Big news da fischer, taxes in north dakota and north korea, as well so keep your eye on the afternoon session. Im going to test drive a tesla model 3. There arent be that many i know somebody who is coming to take a little visit have fun. Lets get to wapner and the half thanks so many welcome to the halftime report. Our to which trade, the great rate debate. Why bond yields keep following and whether it is an ominous sign for stocks. With us for the hour, joe terranova, steve wise, pete i a najari najarian, and also Rick Santelli and onset is paul richards, president of medley global