Consumer this morning. Well break down earnings. And breaking up is hard to do the chairman of the ftc weighing in on how to separate facebook the dow and s p in the midst of a three session win streak, moving closer to erasing all of the losses from wednesdays big selloff with stocks set for modest open, does this signal a pause in the volatility jim what do you think about that question i think that thats probably wrong. I dont see a pause because at what point today do we start hearing about jackson hole and what powell is going to say and what the president is going to charge were still dealing with a rosy hangover from the weekend talk shows where people really are buying into what larry kudlow said and it is interesting, but home depots comments are very much like what larry kudlow said. That things are a little better than people realize. There is no recession. This is pretty good. I feel like when i hear those things, it makes me think of is the hawks on the fed are going to be gunning for no more rate cuts which obviously is not what this market wants there is there are hawks on there who say are we kidding ourselves . Home deep wrote is say ipot is e great and we have to cut, versus the president who is putting through the payroll tax cut, which is something you do when you have a real slowdown yeah. Looking for opportunities you think the home depot miss on comps and the guide down on comps is great yes i met with carol tomei, what did she warn about she warned about weather and maybe tariffs. If you made some calls or talked with the company and this was not regulation, you know, you have to deal with, went on air to say it, you realize what hurt the numbers is what she said would hurt the numbers, which is tremendous labor deflation when you have something called by the company and then the headline writers or the headline algorithms or computers, Artificial Intelligence computers say thats a miss, how can they not have included the asterisk that carol tomei said would be a problem thats why people recognize why is the stock up . The answer is that the cfo said over and over again, lumber deflation, and that is very bullish for the home builders. People forget how high lumber was. And how much it cost in the meantime, affordability of housing is down goes up, because of rates. Affordability of housing is terrific we have a situation where some of the some of the hawks, not hacks, i dont know why i said hacks. I didnt mean it say hacks on the Federal Reserve, i meant some of the hawks on the Federal Reserve are going to say, listen, home depot says maybe we should raise numbers i want to distinguish who did i say hawks, not hacks. Not hacks. You mentioned some of the technical drivers as well, though it is interesting because jpmorgan this morning and one of their notes comments on the market volatility, but more specific to their Interest Rate research team, they say more than half of the recent move in rates and the inversion of the yield curve was caused by technical drivers. Mortgages, bank portfolios, variable annuities so less than half of the move can be explained by fundamentals such as growth, inflation, Monetary Policy outlook. We have to keep an eye open for those kind of moves that have the effect of accentuating the larger moves in the market which we attribute fundamental reasons for and oftentimes not all youre so right i was doing some work, trying to figure out doing convexity work on your house or your floor . House house houses. Ive got a housing business. I know you do convexity is an issue. When does the paydown in mortgages, and people dont realize, paydown in mortgage is very aggressive. Look at the rates. We never haveseen that before. We dont we tend not to see these behind the scene reasons why you might get what you did in the yield curve who did that piece marco we have a ph. D. By the way. I got one of those. Because so much selling has been technically driven, they argue, they plan to step back in september. Part of the technical strategy now. How about the Morgan Stanley guy who hates it wilson . Still looking for 2700 dennis. Which so which trade do you prefer look, i was listening to pompeo, secretary pompeo this morning. The chinese arent as much of a weakened position. You got to take a long side. I think if youre going to get a payroll tax cut, at the same time as you have a cut in rates do we believe thats a possibility . They said it. Okay. But do we actually think it could happen got any intelligence you can share to add to the post Washington Post and the times today . No. Very closed lips on this one but i do think there is some good news out there, you know. I am such a creature of the of watch, which is, of course, walmart, amazon, target, costco and home depot we now have walmart, amazon and home depot, wah, saying Amazing Things so i think you look, there is this thats not goldilocks. There is no there is no chair that is broken youre dealing with the possibility of a rate of a payroll tax cut, great for the economy. Some people say it is historically been saved because people know it is not forever. True. But i just think things are pretty good in the economy and to your point, usually comes when it is, like, whoa, we got a tidal wave coming, we got to run. Minus 2 gdp. But, remember, we do have the situation where the president s calling the fed chief clueless larry kudlow is saying things are inconsiderably good. Were kind of in this on steroids market. We need black zero black zero is not an hbo show. The emergency plan to have stimulus in germen oh, really . A name for black zero. Like zero dark thirty, black zero, you get black zero, you get the hawks on the fed to be quiet, and then you have a brow beaten fed chief thinking we need cuts, you got larry kudlow saying optimism and hard to fight that youre fighting everything youre fighting the fed, fighting the president , fighting kudlow, fighting the chinese. All youre betting on, cisco guidance, macys, deere, ahmet, Industrial Production and seven month low. Macys is done. Lets take that off the table. It is what . Done what does that mean . Youre not going to get a turn there it is in the mall. There was a time you were supportive. It is like the movie witness. I was wrong. I admit it i thought the mall and the strategy and the herald square, which is beautiful misinformed humphrey bogart. I dont think you the mall i dont think youre counting on sales to tourists going down 9 from down 3 the prior quarter. I know. There was a line in the Conference Call about womens the ready to wear, the womens fashion, they got it wrong, and i found myself thinking, do you think it matters whether amazon got womens fashion wrong . How do you compete against a company that it doesnt matter if they got womens they cant. They cant get anything wrong. Plus, on the nvidia call, do you know what the machines can do now . Lets say david said something really mean to me, has been known to do that and does the arm thing, he says get out of town. Currently computers would say i got to go across the river new Artificial Intelligence internships, it would interpret that maybe you were skeptical. They would pick that up might be some skepticism on my part. David, go jump in a lake. You know, computers would have you go in new jersey and Lake Hopatcong the new jensenships say im questioning his judgment. Thats a big advance. They are getting closer and closer theyre there you could actually be a simulation and no one would know, why does nvidia go up ever since that quarter why does it continue to go up . It is called inference they have the ability the computers now with jensens chips have the ability to confer thats incredible. What do they say about macys, the chips. They got the wrong merchandise and people dont want to go to the mall eim thinking about macys gener generically. We have national brands. What do you think the millennials are rebelling against . Didnt stop the chair of jcp from buying a million of the shares at 59 cents 59 cents, i mean, not many things that are national brands. Theyre not doing well in that what i think theyre doing well in, thats why kohls started up too, they got amazon in the back, you can return things there. They got Planet Fitness. You know what they do on tuesday at Planet Fitness . No, what do they do pizza night, to make people feel like you go to equinox and youre like, im fat, im weak, i got to get out of here, im pathetic you go to Planet Fitness, im svelte and tough. Comps still missed. My travel trust owns it the stock was down 5 after macys remember, theyre strip mall, which is better. Macys is a metaphor, okay theyll come back down, the shorts are pushing it. Im using macys met fhtaphorimy steve tanger talks about sa f sephora is doing okay. It is heavily Indebted Companies that came out of the leverage buyout, like a michaels, thats what they say is the real weak kept alive by years of low rates. Yes people say sears would have been gone years earlier. What do you think about that . I there is some truth to it why does macys not get credit the amount of money you needed to invest in online is incredible you go over what target did, Brian Cornell does not have the kind of money that walmart or amazon does. They manage to put a huge amount of money into online journal did a piece yesterday about triple b rated companies dae levera deleveraging your investment collapses. Do you think they they did have a billion in the bank have you seen bed, bath . Market cap is so low. Wow thats what i feel about the 59 cents. What is interesting about that jcpenney buy, it is hard to find things at dollar tree for 59 cents. Maybe what hes doing is looking for a real bargain, right . Do you know dollar tree has thing for more than a dollar looking better where is lampert lately . Or seratage . I thought it was a bed maybe it will be. When we come back, well get cramers mad dash. A lot to choose from today as we get closer to the opening bell look at the market well get you this upgrade of beyond meat. The amount of money apple spending on shows, from layoffs at u. S. Steel. Back in a moment welcome back mad dash, we get you ready for opening bell, 13 minutes from now. We have been talking about retail this morning, giving the earnings from home depot and kohls. Tjx is one we didnt get to. Sometimes i find myself theyll have underwear mixed with the socks not the best presentation people arent there for that theyre there for the prices the reason is because when you hear macys, i didnt mean to offend macys, im talking about the generic Department Store, when i say too much inventory and they have to sell it, it sends to be bought by this company when they missed in the comps, every time they missed, you had to buy it. Thats whats going to happen today. Rare miss. Then the considered analyst will come out and recommend this stock. Wait 24 hours and then buy it. Then buy it. Yeah. It is what always happens. Mallbased retail, you think this has a Brighter Future all price does poorly when we think that the economy is better so off price goes down today thats the way it is Michelle Goss just now said some things about tariffs on kohls what you never want to hear is the word tariff when it comes to retail, except when it says we planned for it you hear tariffs, again, anything that says that the merchandise got too expensive, you buy tjx. A lot of people like you are concerned. Is this the beginning of a head and shoulders pattern . I dont care not unlike marshall st. Gerard in the fugitive. This is a quarter that is surprising to people tjx, the Great American retailer homes goo home goods, maybe a little problematic. Have you ever noticed you go there for thanksgiving, and theyre all bit end of hal weep, all the thanksgiving stuff is gone. What do you do where do you go . I dont i dont go anywhere. I dont go anywhere. Do you like thanksgiving . Sometimes we have not gone beyond turkey yet a bunch of guys recommended beyond meat. No way. What . You dont dont you like chemicals . Better living through chemistry, beyond meat. Another new slurry to replace turkey we have a lot more to come by the way, kyle bass, will join us, giving his perspective on the ongoing situation. Lets give you one more look at futures. We open for trading ten nus mite from now dont miss it. More squawk on the street. Lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Can we build ai without bias . How do we bake security into everything we do . We need tech that helps people understand each other. That understands my business. Weve got some work to do. And we need your help. We need your support. Lets expect more from technology. Lets put smart to work. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Close to closing out last weeks selloff declines still down for the month and futures eroding in the lt lfasha hour opening bell in about seven and a half minutes youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in under five minutes. Another busy tuesday coming up, the best twoday gain for the major averages since the beginning of june. Gives you a sense of how squirrely august has been. U. S. Steel is planning temporary layoffs for hundreds of workers at a michigan plant. The company will halt production at its facility due to lower steel prices and softening demand u. S. Steel says the layoffs could last beyond six months and impact nearly every area of the great lakes facility just last week at a rally in pennsylvania, the president said the Steel Industry was thriving. Pennsylvania steel raised the sky scrapers that built our cities and, by the way, steel, steel was dead your business was dead okay i dont want to be overly crude, your business was dead and i put a little thing called a 25 tariff on all of the dumped steel, all over the country, and now your business is thriving. We know what happened to the share price of most steel producers. The last couple of months, there has been a turnup in price, which is good remember, where does steel go . It goes into auto. And auto is just not strong. So it really didnt matter, you can you can put tariffs on anything, you can keep steel from being dumped, but if the actual end market isnt strong, then it really doesnt matter what the president does. You cant get autos to go up to 19 million if theyre stuck at 17 u. S. Steel u. S. Steel is hostage to the economy and construction turning down a little bit, according to it is different just not great. U. S. Steel market cap of 2. 1 billion. Beyond meat is how much bigger than . Beyond meat, you know, beyond meat is the it is impossible meat david makes a good point. Beyond meat up in the premarket. Upgrade today out of jpmorgan. Upgrading to overweight from neutral. Citing potential for the company to acquire new customers, continued strength in measured data and valuation. They also take campbells to neutral from under. Cant have campbells as a sell the management there used to be from pinnacle, good job. Not stating any longer. Now they have like keurig has a good manager. Keurig is doing quite well keurig and dr. Pepper. I get the case of beyond meat. It is the new way there is really an interesting line in that recommendation. Food services are going to start using beyond meat. You go to your cnbc cafeteria and say i dont want dead cow methane. I would like some chemicals, please i want to see substrates flurry. Yes, with some salt i like a box of salt i would like a box of salt it is, like, look, the guy, they have a product that people like. And you may there is no accounting for taste, david. As were talking, home depots calls going on lumber price deflation, negatively impacted comps, by 340 million also, took advantage of an attractive Interest Rate, raised 1. 4 billion in longterm debt. Buy back a lot of stock what a juggernaut. Cant bet against them one that i have to rely on, the disney whistleblower is getting a lot of attention what am i supposed to make of that a lot of attention. Stock is down big. Is it i mention it last night you said im with iger. I am with iger. They used the billions of dollars number they have auditors they have a very powerful board. The idea they have systematically overstated their earnings was a little put it in the ge category, ge has done, i think, what they had to do the idea that disney, no i recoil from that the fed should be the ultimate golf ball, it was supposed to be hit out of the park like home run derby no you cant give it to me. Nor will i. Opening bell, big board this morning, we take a look at who is ringing the bell, aware Asset Management they celebrate the launch of their new etf. Nasdaq, european paper and packaging producer metsaboard. A lot of news in apple ft says theyll spend 6 billion in content, not as much as netflixs 15, but thats a big number. True. I dont know it is true but to go from not quite zero, but a low number to 6, big ramp in a very short amount of time takes a while to get everything moving that seems high. Thats a very big number. I agree with that. You see apple, you get 3 on uber people have been saying where is very critical review saying, look, dont get the air miles, dont get big discounts but theyre in there i bought the apple card this weekend. Got my 3 back i felt great you felt good about it . I felt great about it how do you think you get rich in this country you have mastercard . They may have the best read on the credit card, maybe better than goldman it is goldman, and apple, mastercard the thing everyone is exited about with the credit card, the cost of acquisition. What people are concerned about is it more than just apple pay will there be people who didnt use it before or will it just be in your socalled wallet a magnesium card we had a good dock on last night for fyre fest. American great. Will it be used. I have the apple card. I like it. But then again, im an apple junkie i admit im not the right candidate. I dont use credit cards i dont use, you know given where Interest Rates are, versus credit card rates, do you think credit card rates are way too high. Too high. Do you know what the credit card rate is in mexico now 41 . Their rates are at 8. Mexico they had real trouble lately and it is palpable how difficult the government is right now. Very good article about natural gas and wall street journal, how they they have a pipe, they need natural, theyre short natural gas. Mexico has some of the biggest reserves mexico and venezuela, huge reserves. Went from credit card rates to oil i was going to talk about do you know why all the Credit Card Companies are in north dakota call centers. Every other state. Prevents you have having 16 user rates. Usery laws. Thats why. I just learned something. Keep that in mind. All right. How about home depot being the largest contributor, the headlines came out and you wanted to throw up and then turns out it is fine Everything Else is down. Including nvidia my dogs getting we have one deal we should talk about this morning. Hur all about the humanization of pets. Key theme of yours, and good one, by the way. I talked about bayer, some call it bayer, they call it bayer in germany, enormous chemical company, monsanto, with all the roundup litigation, they committed to certain asset sales. One may have been happened faster than people had anticipated. It makes al s elanco one of the largest. Cash and stock theyre going to finance 5. 32 billion theyre going to pay to bayer and then be issuing i think 68 million shares as well. So bayer will be an owner as well owner of elanco. Takes them to five times leverage they say theyll get down to as little as three times, cash flow characteristics of the company once the deal is done, by 2022 thats pretty levered. Many investors argue you should be more levered. Particularly in an environment like this. Though others say, what if a recession happens. They do not cut back. Thats the last on the list to go. Youre getting more, that makes the elanco balance better. So i like this more. It does help the company, which has been a laggard when you talk about the terrible swine flu epidemic, theyre trying to solve that in china. They dont have it, but they have fantastic pets the pet margins are extraordinary. Which is why will pets eat beyond meat . Will pets eat beyond meat one of the categories that people have really embraced, dog edibles. Dog edibles we have nothing my dog is a stoner. Is he yeah. They have arthritis, dogs have arthritis and there is some things for them, but nothing like edibles you should see the way dogs get around after they have no thc. Not psychoactive, cbd you said your dog jumps on the bed now with more ease than ever. Nvidia tried to jump up the other day and didnt make it, i pulled out the cbd, half hour later, dog is jumping around my bed. Nvidias got game. Maybe you can jump on the bed too. It is not legal in my area, unless you buy it from you cant buy, like, there is some cbd you can buy. It is wouldnt you like to be able to jump i jump high with spike seltzer. Truly. Truly. Dont get the lime it is horrible i dont know what youre talking about. He doesnt know truly you dont know some of best spiked seltzer there, is im a truly guy. You have to hang out with millennials. Do i have to . Yes because otherwise, youre stuck going to, dont know, the mall they dont go to the mall. It reminds me, once again, jim, you got barbell, home depot, one of the best names on the s p today and tjx, the worst. Yeah. I think tjx, you want to buy tjx after some guys lower the price target tomorrow. There is a lot of profit taking. Estee lauder was an amazing quarter. Surprise coming in right now estee lauder, used to be 30 american they cut that down to 13 america is not as good a market as china great numbers in israel, great numbers in russia. North america they knew they knew. Insta and insta and insta. The ceo spent a lot of time with young influencers in china talking to young people to see what they want thats a great Growth Market imagine sitting down with youngsters, talking about how they look better. Yeah. They love tom ford, by the way. Tom ford remember, tom ford is also scatt logical. He goes out on a limb. I havent jim, netflix has only been below 300, a handful of times this year. But it is a dollar and a half away you think this is a pressure from the pricing on apple, we think, reports indicate 9. 99 a month going live in november, being more expensive than 6. 99 or even the Free Services as well that disney will offer at a discounted price of almost 30 for the list what i come back to is how much money i dont know if the number is correct or not, but regardless, how much money is being spent on content by all of the companies. Hulu, amazon, netflix. The sums of money paid to ceos and upper management and the Entertainment Media business is stunning. You sound like elizabeth warren. In that case, in this case, shes right. Really . Yeah. I dont know. It makes your contract look like nothing, my friend. Zipity dipity doodah versus the bosses. I was going to talk about how good roku was. The cfo of the Media Company you dont even know makes multiples of what you do. You think i think thats right . No, it is not right right or wrong, it is what it is come on. A man who, you can argue drg. Johnson was on yesterday. How did he do . I dont make as much money. I should make more money im going to call my agent call my agent right now. I have him on speed dial this is outrageous viacom will pay their ceo well mr. Bakish, ianniello staying on hell get his 70 million when he leaves, ianniello, could be fairly soon, well see and you and i sit here i make fractions of what you do. Think how i feel. Im a loser im not what i appear to be. Yeah, i mean, bakish will make 55 more this coming year than he made last year and i saw one table that puts him now, will be in the top 20 or so paid s p. You look as the list, youll see media ceos among the top my company say again his helmet Antonio Brown im appalled. You work a lot. I work my ass off i was up at 3 30 this morning working. Harder than pretty much anybody i had the pleasure of knowing. I was tweeting how bad the Canopy GrowthConference Call was, 3 30 in the morning you read the jcpenney call. Yes, i did. Why guys wake up at 5 30 right i get up earlier than the bad guys im underpaid versus the bad cf cfos make more money than i do how is that possible ill show you how much how much the top employees at many of these Media Companies make. Thank heaven my wife doesnt watch. Youll love it. Were 50 points or so once again from 26,000. And 88 poi points above 2900. Happy tuesday, everybody. Yields down, stocks down i dont know when well break this pattern when yields are down, cyclicals tend to be on the weak side. Banks are down semiconductors, transports, this is really regular pattern were seeing, energy materials, all a little on the weak side. We had a nice rally, though, since the bottom, what was it last thursday, the dow we pointed out yesterday, dow moved this was the bottom on thursday, thats 800 points. What is it based on . It is just base on a lot of hope as far as i can see, you can see what were getting here, the hope for stimulus from germany, more stimulus from china the hope of this endless u. S. China trade agreement materializing in some form or another. And shortterm, the hopes that the fed is going to send very dovish signals to jackson hole, an academic conference, not designed for people to stand on the driveway and tell everybody dont worry, folks, well be whatever you want, well be as loose as we have to be expectations are very high, shortterm, particularly for jackson hole markets up recently. Seems to be risk is a little more to the yun sidownside we could be disappointed and what is going on over there. We had the cyclical rally going on in the last few days, the yields have come up a little bit here energy stocks, financials, technologies and industrials, materials, here is all the cyclical group this is since the bottom on thursday what has been going on elsewhere . I think important to take a look at the retail numbers. Jim has been talking about this recently we see home depot, they all affirmed their full year guidance, thats the single most important metric their comps and sales missed on this particular quarter. I concentrate on this, this does make a difference. Kohls is one of the big buyback monsters of all time if you look at their numbers here, they had 1. 55, consensus was 1. 53. In fact, because they have been active Share Buyback companies, two cents of this was because they were buying back stock aggressively if you discount that, theyre in line if youre interested in really growing your earnings by actually sales and business improving rather than financial engineering, it does matter. Kohls is a great buyback monster of all time. W if you look in the last eight or nine years, back to 2010, thats when the buybacks started exploding. 2010 and 2011. So you look here, they had over 300 million shares outstanding in 2010 and look what theyre down to here they had half of that. They got about 160 million. Thats a reduction in the share count of 47 in nine years what does that mean . It means theyre all equal, all the numbers being equal, their earnings are 47 better than they were in 2010. Just because of the buybacks, forget about whether they add in sales increases or did anything to overall improve their business it doesnt mean it is not valid. The numbers are valid. Share buybacks are perfectly valid. For people who are more interested in trying to figure out ways to improve sales and business of things like that, those kinds of metrics matter. Some people call this financial engineering. We call it whatever you want it is a very, very important part of kohls, as well as many other companies. Back to you. Thank you bob pisani to the bond pits, Rick Santelli at the cme in chicago. Yesterdays bounce in yields not only here but globally was very significant after last weeks wednesdays and thursdays global drop. It was very short lived. And thats making traders a bit apprehensive, showing up in stocks look at one week of tens heres whats interesting. Look at last week, intraday low of 147 the low close for this cycle is 153. Here we sit just a basis point or two above that. You look at twoday of 30s, similar. Last week, intraday low of 191 they had their low close forever and a day of 197 we sit at 203. Maybe more symbolically yesterdays failure to close above what had been for many years the all time low yield close of 210 after getting above an intraday of big disappointment from a technical standpoint, bunds also back into the minus 70s. Look at one week of bunds. Everybody moves together, the only thing that separates us is scale. One week of dollar index, continues the staircase it is compressing a bit. We keep striving to take out the 27 month high that is right around 98 1 2. It is not far away it has been not far away for many sessions. It is starting to consolidate. But at the very upper end of a 27 month range and finally, everything going on with trade, though we havent had any tweets lately, look at the dollar versus the yuan here we are again, getting very close to all time not all time, going back to 2007 levels that we havent seen with regard to seven we want to pay very close attention to this move carl, jim, david, back to you. All right, rick, thank you very much. Good stuff Rick Santelli. The chairman of the ftc speaking out about facebook saying the companys plan to merge whatsapp, messenger and instagram could hamper plans to break up the social media giant. He said if they maintain separate business infrastructure, it is easier to have divestiture in that circumstance this comes as the journal is reporting a group of states are preparing to move forward with a joint antitrust investigation of big tech, this ftc shares making some comments with increasing frequency. Yeah. I think that when i read the states attorney general, theyre tag alongs, but the ftc is so aggressive hard to believe that that agency has come to the fore theyre just everywhere. Theyre tough. Yeah, longterm nature of these investigations cant be emphasized enough. So you wonder what the discount will be on the share prices, shortterm, if any. Yeah. Outcome that is uncertain and a long way away. Right. But could result if it were fines, split up the company. Some argue that would be ftc, i think alphabet is a great i wonder whether waymo needs to be there. Set up waymo look, the curve may be inverting soon back to that thinking. Causing the market to down almost 100 when we come back, hong kong and trade tensions between china and the u. S. Kyle bass will offer his perspective on those issues as the secretary of state made comments on squawk earlier today. Were back in a moment. As jim said on twitter a moment ago, yield curve jitters rising again thats the reason no good. Dow down 100 points, though. Were back in a minute hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Time for jim and stock trading. Four months ago a Conference Call, people felt omar didnt do that good a job. I felt, holy cow, this country, any time you move big mistake, a lot of good medical devices. Devices much stronger than pharma stocks. Omar is terrific, very softspoken. He does a great job. They have a lot of new products. It is going higher. Growth story. Exactly not unlike edwards where you dont have to crack it up. Medtronic has great devices, really great. What about the show tonight. I have a stock, many people dont understand what it does but they buy it anyway it follows you all over the internet it says im going to tell you youre a bad ass coder thats the hint. Dont do bad ass coder. Cursing. Thats their signature statement. If you type in bad ass coder in google, they are going to follow you everywhere. At work cursing left and right. I dont mind, i like it its real. I dont think coal should be down that much. And i dont think ass should be a curse word. Im just telling you the company uses that name youll be followed forever by them if you type that in. Got it. Well see you tonight. Absolutely. 6 00 p. M. , mad money, dont miss it. When we come back, kyle bass at hayman capital were down 80. Good Tuesday Morning welcome back to squawk on the street. I im Carl Quintanilla juggling a bunch of Different Things including an eye on fixed income, home depot and more. Our roadmap for the hour, though, begins with stocks sliding, stopping a threeday rally for dow and s p. How to play the mark in this recent volatility. Retail roundup, calls on djx. Well go through the numbers and tell you what they are signaling about the state of the consumer. Hayman capital kyle bass will join us, talk about trade relations, Global Markets and see what else hes got on his mind. Maybe hong kong dollar . Sure, you can ask him about that. Get to the markets. As we mentioned, moving lower, dow and s p 500 in the middle of threeday win streak amid market uncertainty. Earlier on squawk on the street, investor discussed why hes not worried about the recent selloff listen. My bottom line is that when you think about all the developments that are taking place, and everyone is worried about them, it doesnt mean a lot in the longterm we invest in Growth Stocks for the longterm and dont worry about all these things that everyone that you read about or hear on television every day. Thats whats given us the good performance. They are not worried. Bank of america, Merrill Lynch put out a survey where they asked investor clients where we were headed into a recession it was a 50 50 Response Rate a majority of people said 2020 there were still plenty of optimists that said 2021 or beyond its confusing reading the Economic Data, reading the market signals like an inverted yield curve and whether that meant anything given we kind of flattened out, went higher afterwards reading some of the better data and some of the better commentary from Companies Like home depot which shouldnt indicate any kind of major weakness in the consumer. As we said with jim last hour, guide comps oun, blaming lumber deflation in their words, potential impacts to u. S. Consumers arising from recently announced tariffs. Youre right about the yield curve, usually controversial if he was here bigger story, can we bust out of this 2 range. The question is for the bond market, is it a reflection of the easing that has begun from Central Banks around the world and continuing from the fed, expectations for fed chairman jay powell to continue to say easier policy coming, we can cut rates more or reflection of the fact that the economy is turning and could turn in the next year or so. Theres also a line of thought, sara, that we were discussing earlier that says a lot of this move is technically driven its not necessarily about a fundamental or response to fundamentals, bank portfolios, variable annuities and a somewhat liquid market. Could be part of it ive looked at more of the macro questions right now, which i think come down to the fact are we still responsive and celebratory about stimulus whether fiscal or monetary thats been the theme lately whether its coming from china or germany or the u. S. , all the Central Banks and all the governments are thinking about stimulus you saw the New York Times article about the white house looking at the payroll tax cut, the fed, china also adjusted its rate. Ecp, are they going to buy bank stocks. Does the market respond or pushing on a string where lower Interest Rates dont stimulate a lot of activity or stock market runups like we saw a few years ago. Meantime obviously u. S. Consumer is key in all of this retailers like home deposit and tjx reported results our Courtney Reagan will rundown numbers. Hi, carl. Unexpected results home depot and kohls beat earns, tjx online, all three missing sales. Home depot agree 3 , expected 3. 5 the big reason for the weakness continued deflation in lumber worth 340 million in the quarter. On the call the company gave the example that a 4 x 8 osd lumber sold for average 4. 60 during the quarter. Thats 50 less than the same price last year and down further from the price in the first quarter. So lumber is off in the starting project starting. 4 project and thats why followed so quickly and so important home depot cutting fouryear Sales Guidance as it expects lumber depreciation to continue and prudent about impacts new tariffs will have on consumers overall, not just its business there hasnt been an impact that home depot can see so far to consumers from the tariffs now, kohls comparable sales dropped 2. 9, 2. A unseasonably cool in wet weather Third Quarter, thats what hurt sales of spring goods. Michelle goff said improved during the quarter, turned positive by 1 that positive trend has continued into august with a strong start for back to school. The Department Store maintains its profit forecast and says its continuing sourcing diversity to address higher costs from tariffs tjx, parent of t. J. Maxx, home goods, analysts look for 3 , it was 2 it was the weakest with flat comps. Ceo says the Third Quarter off to a solid start that Conference Call is yet to begin so we dont have a lot of details for tjx yet. Carl. Thank you very much a lot of information for more on the state of retail and consumer, joined by jpmorgan retail analyst and retail analyst john kernen. Good to see you. Chris, why is home depot up so much on a day they cut their comp guide. Basically three reasons why home depot is up one, expectations are low. We heard as low as 1 to 2 comp, they did a 3 in the u. S. , which is strong. The second is cyclical rates are down existing home sales high Single Digits in the back half of the year, up 1 to 2 in recent months investors saying weve taken the brunt of that decline in existing home sales and affects on a lag basis so were only going to get better. The last thing is really the u. S. Consumer is the best house on the block in many ways with core retail sales about 120 basis points lower than last year, its sfabl in the 3. 5 to 4 range if that tariff risk is going away, perhaps, we need to get there. Home depot is best in class duopoly with amazon and investors need to own it. John, at some point buyin conditions out of the survey the other day where they said big Household Items were the lowest since 2015 but investors looking past that on this print at least. Yes i think chris deals with bigger ticket than i do you about i agree retail is strong wage and job picture is very strong you do have a difficult top line comparison in retail for the Fourth Quarter we had our cycle best of spending in the Fourth Quarter last year. So did a little comparison back half of the year, tariff uncertainty. The consumer is strong were seeing that. The winners are an accelerating rate in retail myspace, nike, its the weaker channels of retail like Department Stores that are losing market share. Strong sale bifurcated. What happened with tjx quarter, not the standout weve come to see from t. J. Maxx. 2, people looking for 3, soft line retail is a very competitive space. A lot of competition scaling, retail markets, very promotional. A lot of inventory one of the issues we see in the back half of the year is inventory and soft line. Very elevated. Pressure on margins. Tjx is in a competitive fight for market share home goods comp flat the worst comp out of home goods since 2009 were keeping an eye on that category. Whats the reason for that inventory being higher than might have been anticipated . Its really concentrated in brick and mortar space, particularly in Department Stores i think they came out of holiday last year and we saw very robust traffic. People bought poorly and the consumer weatherwise did not agree seasonally with the calendar and ultimately were in an overinventory position consumers have a lot of choice right now. Digital, amazon, retail market, ecommerce platforms, a lot of brands theres a lot of choice in consumer, too much inventory in brick and mortar, going to get marked down. I was going to say, chris, people have been watching railcar loads coming down pretty consistently the narrative is retailers are going to be more than happy to let inventories come down and not putting a lot of trust in the consumer going into holiday. Whats wrong with that, if anything. I think if you look over, you know, the arc of 17 and 18 where it was accelerating. A lot of retailers were chasing inventory so they had optimal gross margins. Into this deceleration weve seen in the first half of 2019, i think a lot of retailers were not prepared for that, and you are seeing this dislocation, as john mentioned, the apparel channel where they are share shipped. That structural headwind and Movement Online is impacting that category the most i think the risk is, as you look forward, actually, that sales moderated into the back half of the year if you recall, december, consumer basically shut down when that stock market shuttered for about two weeks. The risk is they could get too lean as you get into november and december in the world of highly marked down prone category like apparel, thats a long way away. In most of these stocks until you see that inventory clean up, there will be a lot of weight on that category. So chris, whats baked in right nowed in terms of tariff increase on 3 billion, apparel, footwear, punted to december in terms of the share prices . I think its very dependent on which you know, which company and which category youre talking about home depot essentially put 25 basis points of comp risk into the year for the potential tariff walmart put something in that number but better than expected comps they are seeing momentum in the business. In earnings, good sg a control allowed them to again raise for the year and not really lower for the back half of the year. The real risk around tariffs, theres some in september, but most of these goods for the holiday are in inventory they are in retailers Distribution Centers so its really whether or not the december 15th tariff goes on thats when you see heightened apart, heightened electronics. So really the risk around tariffs is very manageable we estimate the average retailer would only have to raise prices 5 to 7 and thats assuming the vendors dont help them out. Its really going to be a question of what happens in 2020 because they dont go away thats a whole other discussion. The market is not looking forward to that. I think the biggest category is that people are focused on right now is, again, apparel a bit of a pile on the inventory, online and slower trends in the category. All right two big things people are struggling to find edge on chris, john, fascinating good stuff thanks so much. Thank you. Thank you. When we return, hayman capitals kyle bass will join us here to discuss the latest on china adtre tension, Global Growth and much more dow down 54 points squawk on the street will be right back from the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you preorder a new samsung note. Click, call or visit a store today. Welcome back to squawk on the street, fears of a global slowdown amid the trade war with china will continue. President trump said, quote, hes not ready to make a deal. Our next guest agrees, the end of the trade war, he says, nowhere in sight joining us longtime china watcher, chief Investment Officer kyle bass. Have you a fund dedicated to being short, the currency in hong kong and in china to a certain extent or mostly hong kong. Were not allowed to talk about funds per s. E. C. Rules, focus on the region. I think its important for viewers to understand it given weve now youve sort of become a china expert, at least on our air and in your various tweets and the way youre communicating in the marketplace. What is your sense in terms of growth rate in china and what is really going on with chinese economy . I think if you just look to the mistake that the chinese made with the bank back in may, prior to may, there was never a concern of credit risk or insolvency risk in the chinese Banking System in their case, they ended up taking down and nationalizing a bank writtener Bank Depositor by 30 and commercial depositors by 30 . From small regional banks to big banks because that all of a sudden credit risk and solvency risk brought into the system youre seeing china print the slowest gdp in 25 years. You saw the july data that was amongst the worst weve seen the Banking System, they have taken down three banks since may. The last one they took down was a few hundred billion dollars. These are sizable banks. Talking about concerns or belief that the Credit System for lack of a better term in china is going to potentially crack at this point. Do you feel like this is a reflection of getting lower than that lowering rates, Interest Rates for loans, figuring out a way to set the bar at a different level. Right i think youre right only the chinese know when this thing is going to go the way you think about it, if youre as levered as they are, as many assets spinning on plates as they do, and a few plates start falling, its going to be difficult to keep all the other plates from falling. I feel like starting to see plates fall with the banks. Doesnt appear leadership seems particularly concerned in terms of trying to enter into significant discussions to get a trade deal hammered out that conceivably would benefit the economy. I think they are focused on waiting trump out. I think, you know, look, weve been talking to the chinese about trade since january of 2018 were in august of 2019 and were still talking away so i think their m. O. Is to try to wait trump out and hope someone more pro china comes in in 2020. I think truthfully i think trumps political calculus is to keep talking if he does a deal too easy, hell be attacked from the right. If he does a deal entirely too difficult, they wont sign it. I think hell get attacked from the right and the left if he actually does a deal with china. Some unanimity on this issue politically, interestingly. There is. The president ial candidates like warren and then even democrats like pelosi and schumer and others have outflanked trump to the right on china and hong kong and said we need to act in helping them preserve freedom and democracy or forcing the chinese to live up to another agreement they signed and have reneged on with the uk. You just brought up hong kong the situation appears to be a little more stable thank the last time i spoke to you a few weeks ago. Barely buzzed with bets like yours against it do you still feel like this is sort of the spark that could ignite a bigger fire in china and in hong kong yeah. I think the chinese view hong kong in a very different way than we do we know its the financial center, raise all their dollars. The chinese are more interested in absolute control and having a Popular Uprising threatening the legitimacy of the communist party. Unlike in the u. S. , the chinese can think in noneconomic terms, and they think in terms of power. So i thinkwhen you look at 11 weeks of protests, and its rumored estimated 1. 7 Million People protested along with our friend Brian Sullivan in the rain this weekend, youve had 11 weeks of protests, the chinese are boxed in i think its a really important time to think about if you are in hong kong and you ran a business, would you be investing more cap ex in your Business Today . Would you be moving family members to hong kong or moving away this process takes a long time to move your life somewhere else if you read a number of articles that have come out recently are showing you that not only are the wealthy moving but the middle class people are moving, too. Tom friedman last week said it wouldnt surprise him if the chinese with a list of advanced Industrial Products which they will never depend on the United States again certainly seems to be the way huawei is tilting. What do you think they can do without from the u. S. In terms of strim machiindustrial machin materials. One thing chinese working so hard to acquire, thank goodness we stopped them, they dont have wafer fabs they need them desperately they are short, 15, 20 years behind and i dont think they can do without those. What about taiwan is that a place they do a lot of those. They do 23 million in taiwan watching the 7. 5 million in hong kong every day. The admirals plan if you look at chinese history and read their plan, the first island chain that they meant to secure four or five years ago and that includes taiwan and hong kong. So the question is when do they go take taiwan if they crack down heavily in hong kong. Clearly thats on the minds of every taiwanese around the world. Its the golden goose wouldnt they be crazy to intervene with the whole world watching shouldnt they wait it out if youre in hong kong, your own leader that turned her back on you the police have come and beat the living hell out of you you have no trust in police, no trust in leadership. This is what happens when these kinds of architectures fall apart. Youre not going to wait out poor leadership and distrustof your police. The people in hong kong are fighting this existential battle for their survival over the next 27 years today. You think separate from the extradition bill, they dont believe that its truly dead its not. So fundamentally the way the extradition bill is, they say its dead, hasnt been withdrawn, the way hong kong law is, in 12 days, they could renew legislative efforts today and 12 days from today it could pass. What i think is likely to happen is they replace carrie lam at some point in time, the communist party is, bring in a hardliner and jam this through is whats going to happen. Kyle, looking back to the macro view of the world right now, in particular, debt levels, something you and i have been talking about for a very long time since the crisis. I went back and looked at your 2011 letter from november 2011 you wrote then, as it stands today total credit market debt is 310 of gdp. Again, this is eight years ago were saddled with peace time debt without any playbook for what happens next. Enormity of debt burdens of portugal, ireland, iceland, greece, spain and others and at some point u. S. , schemes to lend more toss debt problem or fail miserably. Theres no savior large much for the magical pull of capital to stave off unfortunate conclusion for global debt super cycle. We think hard defaults we have negative Interest Rates. Were you wrong absolutely. You were wrong . Absolutely. When you look at japan, japan owns 70 of etf, bank of japan owns it. Its monetize 115 of japanese debt what did you get wrong here all the Central Banks of the world will never let a hard default happen they will keep printing. What did we teach entire princip princip principle edifice . It doesnt matter. Im 90 sure youre going to see europeans restart qe next meeting. Insane. Japanese print money like its a national pastime. Europe is going to restart qe, change the capital key youre going to see greece, portugal the president is pushing for 100 basis points decline overall for rates from our rates. Our rates are going to zero whether trump gets it in one move or not. You think so . Why . Were the only one with an integer in front of bond yield we have 90 of Investment Grade debt we have rule of law and decent economy. All the money is going to come here all the money will come here. Dollar new high. Dollar is going to continue. Why doesnt administration understand the dollar is driven by more than just rates . They do think about this the moment we started yield conversation, we started thinking bullet a century bond that was our political edifice were going to issue 100 year debt for yield curve, its going to collapse. Are you in the recession camp i believe were going to see if europe is printing negative pmi, China Growing at the slowest rate in 35 years, the u. S. Cant mablgically grow its way through that im saying were going to have a shallow recession potentially in 2020. The larger idea you dont add debt to solve a debt crisis. I guess maybe you do. You do. Do you stay in negative rates then how do you get out of negative Interest Rates i think the crisis that this central banking cabal is going to have to deal with, we always talk about the wealth disparity, i was just in anecdotally at a doughnut shop in dallas ive taken my kids to for 20 years. The lady inside was crying she said i cant sell enough doughnuts to stay open, i have to close, the ballet store next door is closing. The price is going up. Think of the price of all housing, all rent, everything except technological deflation has hit us think about the middle class, they cant afford anything the negative consequence unintended consequence of central bank printing, it makes the rich even richer and makes the middle class stay right where they are, and it makes the poor, they stay poor i think what youre going to see, youre going to see more violent crime. Youre going to see crime rates pick up. Youre going to see asset prices continue to go up. People arent going to be able to afford them you cant charge more rent without raising salaries and people cant raise salaries. I think were going to get to a point where asset prices go up and get stagflation and its a problem but incorporates will stay low. Kyla lot more to talk about here but weve got to wrap it up for now. Well see you soon. Thank you. Kyle bass, hayman capital. When we come back, another economic slowing sign. Slowing rv sales might be an Economic Indicator the journal did a nice piece yesterday. Worst performing on the dow, includes dow and intel back in a minute dow down 75. Time for etf spotlight, taking a look at oil, Gas Exploration ticker xot pulling back after coming off best day of the month. Xle also trading lower after surging yesterday on geopolitical tensions in saudi arabia the energy sector, flat for the year, remains biggest laggert among 11 sectors. Lets get to sue herera good morning, sue purchase good morning, carl, good morning, everyone here is whats happening this hour hong kongs leader announcing formation of a group to look into complaints about Police Behavior during a protest. She spoke at a News Conference today. A factfinding study, robust system to investigate and look at complaints against police over this prolonged period of confrontations and violence. The arrest in hong kong a major topic as Foreign Ministers of hong kong and south korea meet counterparts to discuss Regional Cooperation the meeting come amid escalating trade dispute between japan and south korea. Here at home a utah businessman paying 1. 3 million for 1894 San Francisco minted silver dime. It occurred during an auction last week. Its one of the three most famous coins issued by the u. S. Mint the San Francisco mint produced only two dozen early versions of the coin and now only nine are known to still exist you are up to date thats the news update this hour guys, send it back downtown to you. David. Thank you, sue. When we come back here at the nyse stocks are down. You can see that after teeayhrd winning streak in dow and s p. Well tell you where to find value in this market uncertainty when squawk on the street returns. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Stand up if you are first stand up if youre a mother. , veteran, or youre in a military family, please stand. I will tell you this, Southern New Hampshire university can change the whole trajectory of your life. Welcome back to squawk on the street. Stocks moving lower putting through that threeday win streak of dow and s p in jeopardy joining us with what to do next chief investment strategist brian nick also Asset Management, president and chief investment over curt hartm hartman. Welcome to you both. Brian, what do you do after tremendous volatility over the past week and still have the trade and Monetary Policy overhang. Just like any roller coaster, we think this will end up where it started our target for sn p is basicall where it is now, 2800 range. More trade volatility. I think investors are going to assume tariff in effect, september 15th tariffs will go into effect and we could potentially escalate from there. I wouldnt be discounting the idea were not going to see escalation just because were approaching next years election. Can the fed make it all better. We dont think so the fed would have to surprise people with a mid sort of rate cut, 50, 5 basis points. I dont think well hear that, get that from the fed. If they do orderly 25 basis point per cut, thats basically whats expected and therefore not going to be a huge boost in the equity market. Not a huge boost to the economy where the consumer is not overly leveraged, doesnt need rate cuts. What are you telling your clients . You want to look for noncorrelated assets if you use the market as an opportunity to trade money, you want to look through the next two months youre going to see a lot more volatility until the trade dispute settles down i think what you want to do is say i want to own stocks towards the end of the year. I wouldnt be trading this market here. Kirk, as somebody who has experienced in fixed income, you oversee all assets classes now, our last guest kyle bass was talking about he thinks we could see 0 Interest Rates as money flows over to get a return where are you on that argument i think the bond market has gotten a bit ahead fed Fund Futures Market looks like 100 basis points lower than 1 range the market wants the twoyear, 50 basis points. I dont think thats going to happen to your earlier guests point, i think 25 basis points is probably expectation, maybe another cut by the end of the year the bond market has gotten ahead of itself. What would happen to stocks, brian, in that kind of environment, if we saw rates go lower and lower and lower, all the way to 0 in it depends why bad Economic Data it will follow down if we see banks come in with bazooka, the rumor for september, we could see temporarily lower. There is a sense they could put boot on the end of the yield curve in europe and cause rates to fall down that wouldnt be a bad thing for equity markets in the u. S. Kirk, if bonds are ahead of themselves, does that mean equities look like a better bet right now . Well, the yield on equities is better than the 10year treasury and s p 500 i think equities in terms of relative value look pretty good. Again, i would look for trading this but i think towards the end of the year, i think its possible once we get through all this, which well, i think the administration will sign some kind of deal i think its possible that equities could start to move up towards the end of the year. And yet Growth Stocks still seem to be in favor over the higher dividend yielding value stocks, brian. So how do you play that strategy given we are seeing lower and lower yields yeah. Were trying to look for the overlap there, trying to stay defensive. Anything with the yield a strong bid at the moment. Ms lookforundervalued growth, hard to find with growth low tech is having a fantastic year. One area we like that hasnt done as well is health care. Thats gotten beaten up with political announcements, some of the candidates, risk around health care. We dont think thats as huge a risk heading into next year. Thats growth and could be up second half. Kirk, brian, thank you for joining us. Thank you. Thank you as investors fear a looming recession, or at least the possibility of it, some are looking to the road for a better read on the economy. Our Frank Holland joins us with a look at rv sales as an Economic Indicator. 14 months since downturn in rv sales with june of last year marking start of the decline towables, falling 20 , motor homes 23 yeartodate, another sign a recession is coming to keep this in historical perspective, five of these official rv downturns since 1981 according to tom saab research, only two in 36 months preceded recessions one before the earl 90s recession, one before the great recession. Since 2009 rv sales increased when the rate on the tenyear treasury note decreased. Over the past year and especially last six months, that comes to an abrupt halt. The tenyear falling by 25 in the first half of the year, overall rv shipments have fallen by 20 trends but not the whole story tariffs raised the input cost for rvs and led to price increases for manufacturers including Industry Leader thor and winnebago, also components a substantial expansion in the rv rental market its estimated to have grown more than 45 since 2009 theres a number of head winds impacting rv sales so a possible warning of a recession but an indicator that may really be skewed by a number of external factors. Back over to you. Fascinating anecdotal work. Thanks frank Frank Holland on rvs today beyond meat, from overweight to neutral, up 5 from ipo but down double digits in the past month. Dow down 81. Lets get to kate rogers in ann arbor, michigan, with a look at squawk on the street. Were here at massive innovation where Companies Testing out for delivery to unmanned dlifrleriverless robot delivery well tell you all about it coming up on squawk on the street. Rick santelli at the exchange good morning, rick. Id like to welcome my guest, morgue steam Investment ManagementBrian Weinstein brian, lets get right into it move that moves markets. China adds more stimulus, germany talking about for the first time maybe not so much a surplus in the budget but write big checks maybe 50 billion euros our Federal Reserve talking about lower rates eu in general, september 12 is supposed to be a bazookatype meeting does this fiscal and monetary, weve been using it more than organic growth has been bubbling up. Yeah, rick, i think it has a price. You look at global yields and how much it has fallen, the market is skeptical it can come together to get enough organic growth to go the right direction. The price might be confidence in the system. You know, many stock markets in the past like the nasdaq almost doubled five months before it crashed. What are investors to do if all of that stimulus is probably going to help stock prices but maybe theres questions in the macro picture . I think you see it in the price action, people are buying safe havens, equities are fine the big move duration, safe assets have done really, really well investors are putting money in places where in case they are wrong, they can get gains. U. S. Treasury market has been a big beneficiary. You know, when i look at the corporate arena, for example, Investment Grade, lqd at alltime highs, spreads in the Securities Markets are very tight on Investment Grade. Why are investors so easily moving into these areas without increased compensation, in your opinion . I think its all part of a grab for yield and the fact u. S. Growth, lqds, u. S. Companies u. S. Growth has been okay. If you cant find it away from home, go to the u. S. Market, find safe assets we dont expect corporate rates to default to lqd is a good place to get extra yield. Do you expect Jay Powell Company are going to continue the easing or was that a one off and recent data points will hamper longer term easing cycle beginning in the near future. We think they will keep easing i dont know if they can get ahead of the curve i dont know if the data is where it needs to be as aggressive as they want. Make no mistake, a couple of eases, how far and how quickly if they fall behind the long end will rally more. So easy, inverted curve, everything going to be recession in the future. When i look at the curve putting the threemonth aside, it definitely is getting flat what do you think the implications are if it doesnt really have major inversions over a longer period of time the implications are what you said earlier theres not a big risk to growth and inflation. The question is how long can we muddle through i dont think we can do it for but low growth, grab per yield if growth stays positive or a little bit above zero, a lot of assets can do very well. You know, theres always a lot of debate as to why investors seem so enamored during questionable times with gold doesnt the fact that Interest Rates are so low and gold is a sterile commodity, it has negative carry, isnt that a large part of the reason as well sure. When youre dealing with zero yields. Brian, we have breaking news, im going to have to go. Thank you for joining me today carl, whats going on . Rick, were getting news on volcker rule, dominic has more on that. Carl, what we have is fdic, federal deposit approving rule changes to the volcker rule that the clarify rules on what banks can or cant do with regard to using their own money for investment purposes. In this care here fdic has approved changes that will allow banks to use their own capital to facilitate client krads ottr Principal Market or marketing opportunities, it will look like those trades will happen another version was already signed off on by the office of comptroller earlier this morning. Two agencies there, five in total have to approve these particular changes to happen the Federal Reserve, the ftc, cfdc those three agencies have yet to sign automotive on this. In total, this could be a big change in the way banks use their own money to take positions on behalf of clients and facilitate client transactions well keep an eye on developments here but for now back to you guys. They had been complaining, dom, for time unclear to them, subjective, unclear overall. The rule was preventing them from doing so. Interesting, no real reaction in the share prices you might expect as we get prices you might expect as we get closer to this rule. That is the interesting point here these changes had been talked about for years. You wonder whether or not a lot of the reaction had been taking place in the bank stocks had incorporated some of the expectation president Trumps Administration has been taking active tests perhaps it is unclear how much is expected in this room how substantial of a change is that from the 2013 law . Those held the short term perhaps less than 60 days. Perhaps say goldman sack says well buy your shares for you. Some of those will be more affected with the change, to your point there well keep a oscler eye on it for now, the inverted yield shares will have more of an impact well be right back. Saved by zero how you watch it does too. Tv just keeps getting better. This is xfinity x1. Featuring the Emmy Awardwinning voice remote. Streaming Services Without changing passwords and input. Live sports with realtime stats and scores. Access to the most 4k content. And your movies and shows to go. The best tv experience is the best tv value. Xfinity x1. Simple. Easy. Awesome. Xfinity. The future of awesome. Dominos is unveiling a new Innovation Garage. We have more a brand new massive Innovation Garage in an asher where teams can come together and work on all things innovation the company is going to work more like a startup. Looking a at delivery and bike fleets experimenting with in store kiosks and something new restaurants are dealing with as the environment gets more and more competitive this is the neurorobot you press this it knows my name the doors open and here is a nice hot pizza they are working with neuro. They also teamed up with growing positive people dont mind going out to the curve you dont have to tip anyone and you dont have to talk to anybody. Just wondering if dominos still has the technology edge. Arent other brands cutting into the technology, which made it stop like a rocket ship certainly the stock had been pressured the companys whole idea is that they do all of their delivery inhouse they have said over and over a lot of those third parties are heavily subsidizing and that is undercutting prices. He thinks long term, their strategy will help them win. Back to you. Interesting dont have to tip or talk to anybody. Probably great for you, right . Im not antisocial what have we got coming up today . We are all over the retail results and the help of the american consumer. Talking about the interview that said, he gets it on paris well find out exactly what hes saying clock alley is up next do not go away [woman] i graduated high school 19 years ago. I still finished. [man] in the military, you feel that sense of accomplishment. Thats what snhu is. You will march from this arena and say to the world. I did it. [woman] you did it. I love you. [graduate] i love you too. Good morning. It is 8 00 a. M. At apple headquarters squawk alley is live. Good Tuesday Morning, welcome to squawk alley. Market