Transcripts For CNBC Closing Bell 20140828

Ukrai ukraine. There is a lot of back and forth between these two companies. Hell join us at the end of the hour. Wouldnt want to minimize clearly whats happening over there but certainly at this point at least its had a minimal effect on the market. Even though it has made investors nervous, it has had an overwhelming effect. People, quite frankly, arent here. Theyre heading on to vacation. Do you know how your funding is doing this year against its benchmark . Any one whos given Fund Managers their money. Well have details. On september 9th, and the invites are out and they wish they could say more but our friends are saying more than this just wont and new iphone but the longawaited apple watch will be available as well. Im already wishing we could say more. There is always a double intention. About an hour to go until the close. Dow was off more than 100 points at the session open, now off 44. The s p down about three to 1,996. Joining our krsh exchange now, Heather Hughes from sun america funds, greg ip from the economist. And our own rick santelli, ben, what are traders thinking on the floor as we hear whats happening in the ukraine and try to get our hands arms around it . There is no credibility to the u skran statemenkraine stat out. Theyve lied to us before. Talking about tanks being blown up, captures of prisoners. We knew when putin didnt respond in kind and was able to deny it that we were going to wind up where we are. The fact of the matter is the ukrainian situation has an effect on the World Markets but on the european markets. You saw that the dax and ftse all down 1. 5 because while it is a crisis, it is a humanitarian crisis, not an economic crisis to the United States of america. Youve had the economic statements coming out of germany and the their talking heads say how the ukraine situation sim packeting their economy. For the United States of america its created buying opportunity for flows out of europe into the United States. The market ticks down and the trade has always been buy at 11 30 when europe closes and youll be rewarldderewarded. One trade thats starting to get more talk is gold. It is up a little bit today. But as many people think that is the beginning of something, others say forget about it, it is about to collapse. Were not traders. Gold is a trade. You got to know when to get in, when to get out. Im not sure i agree so much with ben. Russias the seventh largest economy if the world. Yours the biggest. Youre the second biggest. If we get into a contest of sanctions between them, i think that could put an edge to the market that were not going to like to see but i dont think it is going to be more than 10 or 12 or 15 so it will be a buying opportunity. But i cant trade day to day or hour to hour at opens but there will be a buying opportunity if this gets worse and i think it can get worse. Heather the commentary this week feels like its gotten more negative. You have a couple of hyperbolic calls on where the market could go. Other things such as the s p is now running on fumes, according to other people. The Financial Engineering is coming to an end. Buybacks are slowing down. Thats a long list. Youve been a little cautious, too. When the market keeps going up. Yeah, i have. Youre right. Thats a long list you just rattled off there. From the mutual funds space thats just this week yeah, i know. Thats just this week i know. In the Mutual Fund Space were seeing flows, 5 billion over the past five weeks. New flows according to lipper in the u. S. Treasury funds, funds that invest in the treasuries, and thats the fastest pace over the past six months. So you are hearing a lot of bearish noise in the markets right now. Lot of hedge funds were also hearing are reversing their shortterm bets on the treasuries on the backs of this flight to safety, flight to quality play that were all discussing right now. Greg, how bad is it in europe and how much worse could it get . News today out of russia and ukraine, i think the answer is it could get quite a bit worse. A region where the growth was zero in the Second Quarter, their variance goes to further blowback from sanctions imposed on russia or russia imposes on them. Mayor draghi has basically opened the door wide open to some Quantitative Easing Program with the speech i heard him make in jackson hole last week and i think he has a few weeks yet to make good on that promise. Thats why i think the german bund is rallying even lower on that news. Rick, makes it interesting for traders and investors. You have to weigh the negative european news economically from france to italy and germany against a backdrop of expected qe from draghi come september. It is forces pulling you on both sides. Yeah, i know that qe is being viewed in europe as the cure for economic cancer, so to speak. But im sorry, i think that their Interest Rates are so abnormally low as it is, im just not looking at the grander theyre going to get by making them even lower. I continue to think that they are creating wait. Wait. Dont you think theyre going to go higher . If the ecb gets it right dont you think those Interest Rates could go higher the same way they did when the u. S. Was doing qe . I think that mario draghi is going to talk his way into postponing qe, hes going to hire more people like he did to create the assetbacked program. Hell do everything he can, it will drive rates down. In terms of rates going higher if europe, that is the whole ball of wax. Once we see rates in europe move up, everything changes. The relative value trade changes. But right now the u. S. Is the beneficiary. What i like to call the funnel. Okay . Our guest is right, moneys coming out of europe, its going to the u. S. But where is the next place it is going to come from . At some point all of that is going to run out, these markets are going to have to stand on their own two feet. Im not saying theyll have huge corrections. Im just saying it is going to be very interesting to see when we get to the last furlough before 0 rate policy ends. Theyll stay long right until the whites of the eyes of the rate raise because they have no place else to put their money in they sell early. My point then is that, whether qe works in europe or not is secondary. The mere fact if he announces it or the market expects an announcement of it, it is going to rally on that news whether they think it is going to work or not. It comes in secondary. Mario draghi is the Michael Jordan of jawboning. Nobodys ever done it better. Hes done nothing but use verbiage to use the market. Expectations right now in europe are collapsing. Is it working . My concern for the entire world marketplace right now is that draghi will be painted into a corner and the emperors clothes will be shown that there is nothing there and that will lead to this fearful correction. I think the correction has to happen in the fixed income market, not the stock market. The stock market will correct as part of it as the Asset Classes move but we will eventually be the beneficiary of that. Time after time hold on, heather. Stocks are not a bubble. Theyre fairly valued. Maybe a little bit more. But the worlds growing. So stocks will be okay. But bonds, we went down for 30 years. Theres no reason why we cant drip up for 30 years. Theres no greater skittish investors than a bond investor. All theyve done in the last three years has go down. We were down to a 1. 40 yield in 10. Kelly, you made a good point that Inflation Expectations are collapsing in europe. Theyre collapsing because investors are disappointed. They havent seen a more forceful response from the European Central bank. These deflationary forces. Are you absolutely right. Unconventional tools like this come in to play when the good tools are no longer useful. And they have a big psychological component to them. I think the most important aspect of a qe program in europe would be to affirm that the European Central bank is determined to get inflation to its 2 target. That f that were to happen and bonds sold off because inflation were going up, that would be a really good outcome. Right now the further bond yields go down the more scared you shall be. Whats mario draghi going to have to do at this point, he said and promised a lot already and it is not having the effect right now thats needed. What do you think it is going to take now from him . First of all, some of the stuff he has done has helped. His whatever it takes ended euro crisis. They announced measures like a negative deposit rate back in june. That did help. That actually got stocks up and Inflation Expectations up but it is not sufficient against the headwinds like u corroborate th ukraine that theyre facing now. Up until now the talk was theyd wait until mid 2015. I think they have to show us it is in the works before the end of this calendar year. Anybody getting nervous you got a 10year yield 2. 32 . The direct result of the panic trade or fear trade. I know rick doesnt believe in that. But when you have 10year yields and the europeans where they are right now, that has got to be shouting we are in a bubble. The reality is when you talk about draghi, you talk about yellen, the peoples bank of china, you are talking about generals on the field that are involved in a currency war. Generals. Theyre like joe pesci hes the wizard of oz. A general. Whats behind the curtain . I cant believe that mr. Wait a minute. You truly believe making the wage lower is going to work. Theres nothing behind the curtain. What are you saying, rick . I just dont understand how greg ip can believe that a higher inflation rate in europe is going to make the southern economies more productive, it is going to make them more profitable. Whole problem is the deleveraging has to bring prices down. Look, for the periphery countries that are in a crisis to get competitive again they need relative wages, relative prices to drop visavis germany. And you think they can do that it test tubes sand Central Banks . Thats what the Current Administration in country thinks. I think the answer is dont be there. Dont be in europe. Its easy for you to say or it is easy for us to say. On a relative basis the value now is there, not here. Right . Our stocks are you now expensive. I dont know how many people can handle the volatility. It will spike up and down. I think the safer trade is stay in the u. S. I still gleev will be 750 million new middle class families on the planet by 2040. Theyre buying iphones. To ricks point, it is a funnel. Even if the u. S. Fundamentals look okay theyre not going to be unaffected but if it doesnt matter because all the money is pouring if here thats the last thing you want to see in terms of healthy markets. I agree with that. Wait a minute. But if the markets were so healthy, especially in europe and were getting out of the woods and on a path towards economic recovery, then why would mario draghi be committed to doing whatever it takes . Why do we need him if were getting out of the woods and we i dont think we are. I think thats the point everyones making. The depreciating euro is having a negative effect on everybody to have an impact. Follow the dollar versus the other currencies and youll see where were going. U. S. Relative to foreign markets. Guys, thanks. News alert regarding the National Football league. Dominic chu . What we have is the nfl saying that they are not going to tolerate Domestic Violence anymore in a memo to all nfl personnel, Roger Goodell, the nfls commissioner, says to all nfl personnel that Domestic Violence and Sexual Assault are wrong. They are illegal. They are Never Acceptable and have no place in the nfl under any circumstances. He goes on to outline a disciplinary action he says a first offense will be subject to a suspension of six weeks without pay. Mitigating circumstances will be considered. A second offense, however, will result in banishment from the league. An offender may petition for reinstatement after one year but there is no assurance that the petition will be granted. These disciplinary consequences apply to all nfl personnel. So again, kelly, scott, nfl commissioner Roger Goodell laying out harsh new guidelines for disciplinary action for Domestic Violence, the first offense is a sixgame suspension without pay. The second offense is banishment from the league. Dom, the reason obviously you are talking about this, and there was widespread criticism of the commissioner around the National Football league, after the ray rice incident, the Domestic Violence incident in which he was suspended i believe for two games. So there was an uproar over that the day is came out. And the commissioners sort of been under the gun and under pressure since then to increase penalties related to Domestic Violence. Is there this is a forceful statement with regard to how theyre going to pursue this Going Forward. Much like what adam silver did with the Donald Sterling situation. You can see commissioners of these major sports leagues are coming down with these types of issues and saying that they are not going to handle them with just ease like they may have been perceived to do so in the past. All right, dom, thank you. Think thats going to be enough, scott . It is a start. There was such widespread criticism to the ray rice suspension that people are clearly paying much more attention to that issue. On the eve of the season. Absolutely. 45 minutes to go here until the close. The dow off 43. The s p off 3 1 2. Nasdaq off 12. Coming up, significaet jewe surging. His ceo tells us if he thinks the middle Class Consumer is back as we get evidence today and words from some other ceos that they may not be. Also ahead, a shocking statistic about your money. 4 out of 5 actively managed funds underperforming their benchmarks this year. Top fund manager defends their case. Plus, the watch is on for the best smart watch. Samsung and apple gearing up for their releases and the pros are going to weigh in on whether these gadgets will look good enough for people to want to wear them to work and play. Were back in a moment. Thank ythank you for defendiyour sacrifice. And thank you for your bravery. Thank you colonel. Thank you daddy. 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Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. Rears in the red across the board. Dows been down all day. Was down nearly triple digits, or thereabouts. Dow industrials now down 38 points. S p 500 a fractional loss. N nasdaq is down onefifth percent today. Were starting off with Abercrombie Fitch moving lower after the teen apparel retailer on weaker than expected Second Quarter sales is showing a falling share price. Stock is currently off its lows but still down by nearly 5 . Another apparel retailer taking a hit, genesco currently down 8 . A tough day as well for the iron ore miners specifically. This as spot iron ore prices hit a twoyear low. Thats Cliffs National resources, rio tinto, bhp billiton. Lear shares up by 3 . Signet Second Quarter sales soared after a boost by its being a which is of zale. Some surprisingly Strong Performance there. Lets talk more about what is contributing to Signet Jewelers success. Here in a cnbc exclusive is that companys ceo, michael barnes. Mr. Barnes, welcome to the closing bell. Thank you so much, scott and kelly. I appreciate it. How would you say that the consumer is doing by virtue of the sales that you saw on a day when were hearing from some other ceos who are far less confident than you seem to be. I guess were bucking the trend a little bit here. Our business has been extremely stro strong. On an organic basis, we have seen 6. 3 increases in our comp store sales. Even on a consolidated with the new acquisition, were up almost 5 . We are feeling pretty good about the future. We think the consumer is there. I think the real key here is to give the consumer what they want. Theyre out there an they want to shop, but they need something thats innovative, they need something fashionable, they need something new. They dont want the same old thing that theyve had in the past and thats what were trying to deliver with a lot of our brands. We have some incredible brands that are doing very well in both the bridal side and also on the fashion side as well. Brands like neal lane bridal, leveon chocolate diamonds jewelry. I was going to ask, you guys have some of the best sales growth in the retail space right now except for maybe the handbags. I asked a friend of mine whos in the Retail Industry what is driving this success, did he think it was a oneoff or not. He said, look, half of the busy is bridal. So can you just give us some color around that . How much of this is the core strength of the bridal category and how much is other kinds of purchases . Well, im happy to say that it is pretty well balanced. About 50 of our business is bridal versus fashion. The bridal category is extremely strong right now. So were doing well with our brands and our nonbranded product in that category, but on the same side, the Fashion Jewelry is also doing well. The thing about bridal, it is a continuity business. It is not dependent upon holidays and special times of the year. People get engaged every month of the year so it is a wonderful business Going Forward but fashion is also very strong right now. As long as you give the consumer what they are looking for, i think they are going to go out there and shop. Which piece has better profit margins, the Bridal Business or the fashion business . And whats the difference that we are talking typically in price points for these two categories . Well, its certainly a different price point. Obviously on the bridal side when you are talking engagement rings, you are looking at a little bit higher level price point. Fortunately for us, from a margin standpoint, theyre pretty similar in terms of fashion and the bridal. Whats really important is that were driving customer loyalty, Customer Trust by selling our brands Even Stronger than before. Thats really what is helping to drive our business. In all three of our divisions. In sterling, which is the kay and jared division. In the Zale Division which also includes peoples in canada, and our uk division with h. Samuel and earnest jones. We are seeing a lot of strength in diamonds, a lot of strength in watches. Fashion is good. As long as youve got the right product and the right brands, i believe that we have an opportunity to really transform this industry with where were going in todays world. Michael, you are still in what is a pretty fragmented industry. What kind of opportunity do you see ahead to take share from some of the other big box guys, for example . I see a huge opportunity here. After the acquisition of zale, one of the first things we did as a Management Team is said, guys, lets focus on where the real competition is out there. Because thats something Companies Need to really think about that. There are Department Stores out there, there are people, the online competition, television jewelry sales. Theres the super costcos and sams club, et cetera, et cetera, et cetera. We need to focus on where the competition really is and we need to go after that and not just focus on Specialty Retail jewelers. I think post the zale acquisition, our team gets that even better. And theyre really focused on going out there and providing the best Customer Experience which is what the customers are really demanding. They want great products and great Customer Experience. Just before we go, i have one question im curious about. I know you said what the average price point is for example on the bridal side, but how much of these purchases are financed . You know, in the kay and jared divisions, were running somewhere close to 60 in terms of customer financed product. We have a Great Program there. Were starting to see that increase in the Zale Division that we have acquired recently with the new deal that we have there. We think there is a big opportunity to continue to drive that part of the business, and that is important. We use it to drive sales, not just to finance the product and to make the interest off of it. O, suh, sure. Thats a huge part of the business and we think thats going to really help us continue to lead the industry Going Forward. We will leave it there. Michael barnes, thank you so much for joining us. Signet jewelers on a day where the results have investors pretty encouraged. 35 minutes before the bell rings. Dow still in a negative position down 33 points. S pfractionally. Also coming up, td banks group ceo giving us his take on housing and consumer loans. Yes, ed clark. Find out if he expects lending to pick up ahead of next years anticipated rate hikes by the fed. Up next, just because you build it, that doesnt mean consumers will wear it. As samsung and apple prepare to launch their smart watches, well discuss the pompbs looks a pompbs loo do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. This is kathleen. Setting up the perfect wedding day begins with arthritis pain and two pills. Afternoon arrives and feeling good, but her knee pain returns. Thats two more pills. The evenings event brings laughter, joy, and more pain. When jamie says. Whats that like six pills today . Yeah. I can take 2 aleve for all day relief. Really, and. And thats it. This is kathleen. For my arthritis pain, i now choose aleve. Get all day arthritis pain relief with an easyopen cap. Welcome back. Thats a live shot of the white house where we are just learning president obama will be making a statement at 4 00 eastern delivering a statement in the Brady Press Briefing room. Bring you more detail if we get it. Otherwise, halfanhour from now well hear from president obama. Apple issuing this invitation to the press showing the date and with the text. Wish we could say more. It could be revealing a smart watch in addition to the new iphone. Samsung has unveiled a smart watch with a curved display which with access 3g Wireless Networks and make phone calls. But, will enough people buy and wear these watches if they dont look good . Central question. Weighing in, our own jon fortt dawn, first to you with some of the detail as to what we can expect, so september 9th, what do you think we might see . Well, our sources are telling us there are definitely be some wearables. Whether it is an i watch or called another iwatch is the question. What we can conclude from what apple has already said publicly, apple has invested a lot of time into software that can bring together our Health Information in one place. And i think that the next generation of watch will most likely be give us some health give us some Health Information, be used as a fitness tool, perhaps help us monitor our sleep or so jon fortt, whats it going to look like and how important is this aesthetic piece of it . I wish i had a picture that i can show you, but i dont. Wish i could say more. But we know that johnny ive is the head of design over at Apple Software and hardware design. Heaesthetics, about function, also. A lot of watches that have come out thus far have been clunky, so big that only a relatively large man would be socially acceptable wearing them. We are starting to see some refinement in those designs with the moto. Even the samsung coming out. But theyre still big even for a moderate sized man like myself, just barely maybe i could wear that. But somebody with a smaller wrist, wouldnt look quite right. Dawn, is this what people want . No matter how it looks. Is it enough to make enough of a financial difference for apple, samsung or whoever else . You ask an excellent question. There is a whole generation of folks who have grown up telling the time by flipping their phones open or glansing at their phones. There is a whole generation of people who dont wear watches. Design is going to be a key component to whatever apple introduces and others of its rivals. It has toob fashi be a fashion statement. You have to imagine that the folks in cupertino are smart enough to know this. Theyve been hiring people from the fashion industry. Burberry, the executive from yves san laurent. You wonder if theyre planning for this. I dont doubt that the watch is going to look good. The gear s looks pretty good. But i go back so what . People really want this now. Exactly. They cost between 200 and 300. Which is a lot of money for a mass market product. They compete not only with your phone, which has a little time keeper in it as well, but it is also competing with a watch which a lot of people decided they dont want to wear. But whats nice about a watch on your wrist, sure, it tells time, it has a stopwatch and alarm, but you dont have to charge it every night. It has to fit both the stylistic demands of which aring it on a wrist in a way that makes a statement about yourself, and also being convenient and costeffective enough that it becomes a musthave item kind of like your iphone. I do know people who have wanted the short movado because of this. They say dont bet against apple. If they get that right, it could displace this whole category. Thats interesting. Idc pointed out that they believe this market is going to grow four fold this year. These are researchers that have been quantifying the size of markets for a long time. When apple entered the ipad market in 2010, it was kind of a rounding error. Certainly tablet preceded the ipad but they werent at all successful in the market. They didnt have that kind of sex appeal. Are you wearing one, dawn . I brought my very own. This is a samsung gear watch. You have to confess, it is a little shy on sex appeal. It is a little bit like wearing a file cabinet on your wrist. But that said, it is incredibly useful. I can get immediate notifications of all my emails. I can see whos tried to reach me on facebook or twitter. So it does have a lot of utility. Once you wear one of these smart watches, can you see that they really do perform a valid function. They allow you to sort of subtly glance at your wrist to see what kinds of messages you are receiving an whether or not you need to interrupt what youre doing to attend to them. Im going to predict that a lot of these forecasts on wherables are going to come up short, at least initially. Theres an opportunity here for the movados and others to develop bands to make these things sexier, make them customizable, similar to the market theres been in cell phone cases but right off the bat with a lot of these watches, theyre going to need more software, more development. Around them to show people exactly why they need one. Apple might do that. Or make it round. Well, yeah, were getting the round ones in just a couple weeks. Oh. And they are better looking. Ive laid eyes on a couple. Do you have a quick thought on the knife . On whats actually going to go down . I think tim cook said, the predecessor to the code conference actually, that he wears a nike fuel band, a fit bit type device, that those really target a specific fitness area and that if apple were to do something, it is intriguing to do something horizontal that does multiple things, not just fitness. In a wheearable i think wed se that tying in with whats this wish we could say more thing . You know these guys better than everybody. Heres just my guess. Based on no actual information from am fine. Wish we could say more might have to do with a voice interface for these sorts of things. It has to. Maybe it relates to siri. Wish we could say more . It is a cute play on words maybe. They like to do that from time to time. Thanks, both. Weve got 25 minutes to go here. Dow still coming off its lows, down about 33 points. The s ps two points away from turning positive. The nasdaq is off by eight. Still to come, the latest on the situation in ukraine. If Russian Troops are there or not. Plus, reaction from top wall street pro Dennis Gartman. Back in a moment. Dsl myth 1. It can help your business save money. False. The truth is when you compare our Fastest Internet to the fastest dsl from the phone company, comcast business gives you more for your money. Why pay more for less . Call today for a low price on speeds up to 150mbps. And find out more about our twoyear price guarantee. Comcast business. Built for business. Welcome back. Once again we are learning president obama will be making a statement at the Brady Press Briefing room at 4 00 p. M. Eastern before his press secretary, josh earnest, gives that update that was already expected. The president also will be meeting with members of the National Security council, Vice President will also be participating and thats happening this afternoon as well. The two may be related. Thats all starting in 20 minutes. Crisis in ukraine heating up after a nato general announce there had are more than 1,000 Russian Troops on the ground there. Many pegging todays red arrows to todays reports. Michelle carusocabrera has the very latest developments. Significant escalation on the military front. We already knew the separatists had taken over one more town overnight. We learned that late yesterday. Roughly around 11 00 this morning nato holds a News Conference and distributes these satellite images, five of them they say show russian combat pill tear forces inside ukraine. They say there has been a severe escalation in the past two weeks both in terms of quality and quantity of whats provided and at least 1,000 troops. Brigadier general niko tak, hes dutch, says he thinks this is only the beginning, actually. These latest images provide concrete examples of russian activity inside ukraine but they are only the tip of the iceberg in terms of the overall scope of russian troop and weapons movements. Only the tip of the iceberg. As a result, there was an emergency meeting of the u. N. Security council today. U. S. Ambassador to the u. N. , samantha powers, once again very, very harsh words for russia. Instead of listening, instead of heeding the demands of the International Community, and the rules of the international order, at every step russia has come before this council to say everything except the truth. It has manipulated, it has obfuscated, it has outright lied. All right. So significant military ratche rhetoric and military situation, what happens economically. Angela merkel also holding a News Conference. At an eu summit on saturday they will consider further sanctions against russia. All in the same week that we have the discussions between putin and poroshenko. Which essentially fell apart and which actually nobody believed was going to come to anything anyway. This is very typical putin. Right . World, he says, i want a ceasefire, im getting involved here, et cetera. At the same time through the back door hello, invasion. Sessentially. That word has been tossed around a lot in the last 24 hours. It has. I think historically we think invasion is about amassing troops on the border, here we go, war begins. Thats not how hes done it. Its been this kind of subterfuge. We want to bring in Dennis Gartman for his thoughts as well of the gartman letter to react how investors should play this global unrest. This morning it was clear geopolitical risk off trade. This afternoon things looking a little bit calmer out there. I think michelle said it perfectly. We are dealing with a gentleman who was a colonel in kgb. As ive always said, once kgb, always kgb. Hes not going to change his demeanor. He had conversations with poroshenko. Clearly they fell apart. Clearly he has been moving troops and men and materiel in ukraine. He is not going to back down, hes not going to turn back, hes not going to go away. I suspect things are going to get worse, not better. The effect upon us is going to be psychological rather than material. The affect upon europe is going to be very substantive. The europeans have been loathe to increase sanctions but they really have no choice and that cannot be anything but other than ti deleterious to the gernl economy. I wonder if the weak markets is because they really dont think there is going to be a strong round of sanctions. For you and dennis, have we just been too complacent about everything taking place over there from a market standpoint . I think weve been far too complacent. I worry that this could get much worse before it gets better. Hearing the general from nato say this is merely the tip of the iceberg is not the sort of attitude or commentary that you want to say, gee, lets go out an buy stocks with an aggressive wildeyed bullishness. We will be affected less than will europe but we are still going to be affected. The psychology of 24 7 news media going around all the time telling us whats happening cannot be it cannot help, cant make people walk out and say i want to buy a new car, im going to buy a new house tomorrow. Dennis hints at whats the underlying question whats the Economic Impact ultimately. We just dont have a strong economic relationship with russia as does western europe and particularly germany. Right . So were going to feel it less. If we ratchet up sanctions, there is going to be Economic Impact. Thats what drives the markets. Which ultimately could trickle down to corporate earnings you put them all together, theyre the largest economy in the world. Thank you. Well see you top of the next hour for the panel. Well have more time and get into this in about 15 minutes. Assuming that that comes after we hear from the president possibly on this issue. Again, 15 minutes to go here, scott. The dow with a loss of 36. Markets are in the red today. S p is right now at 1,997. 80 of actively managed funds underperforming their benchmarks this year. A fund manager tells us why he thinks you should stick with them and keep paying the fees. Youll be able to vote at cnbc. Com votes. Stay tuned for all of that. And later we go live to the u. S. Open for fan favorite rafael nadal is not playing this year. Hes out with a wrist injury. Find out how that is affecting ticket sales. Well get some reaction from the ceo of prince global sports. Back in a moment. Over 20 million kids everyday in our country lack access to healthy food. For the first time American Kids are slated to live a shorter life span than their parents. Its a problem that we can turn around and change. Revolution foods is a company we started to provide access to healthy, affordable, kidinspired, chefcrafted food. We looked at what are the aspects of food that will help set up kids for success . Making sure foods are made with high Quality Ingredients and prepared fresh everyday. Our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. Working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. We are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. Until every kid has built those lifelong eating habits, well keep working. Welcome back. Lets get out here to our bob pisani who has his eye on the floor of the exchange on a relatively rare down day for stocks lately. Despite the turmoil in the ukraine, the trend still very much on the up side. I think the important thing is theres the dow industrials. Notice how crummy we were earlier in the morning. As we got closer to the european close at 11 30 the stock market lifted. That suggests a lot of the selling came from europe. Once that went away, weve been basically stable for the whole afternoon. Very, very narrow trading range. He we did have a little bit of flight to safety early on. Gold was up. Gold stocks are having an up day. But golds been a sort of sideway trend for a while now. 10year yields moving on the downside. I think the big sector disappointment today was retail. Very disappointing commentary from Abercrombie Fitch and williams and sonoma. Thank you. With 11 minutes to now the s p is off three. Is it possibly going to be another day did you see what happened yesterday . Looked like we were going to close slightly below 2,000, then it ticked you up by just a couple of tenths of a point. Went out at 2,000. 9. After closing at 2,000. 2 the day before. Someone said yesterday, we went 18 minutes with the s p not moving by a tenth of a point. That was apparently the longest on record. In any way, ten minutes to go. Well see what happens this time around. Pending home sales rebounding last month in an 11month high. The head of online Real Estate Brokerage redfin which does nat pay its sales agents commissions gives us his take on the housing recovery. 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Lot of red on the board today. Dow down 47. On the floor now, bob kaiser with s p capital iq. We knew it was going to be a slow week. But what happens when everybody comes back . We start paying a little more attention to all these things going on around the world . I think at some point the market is going to have to address the divergence between the bond and stock market. Higher the stock market goes and the lower bond yields go the bigger the divergence gets and it cant be ignored forever. Volatilitys going to pick up. We have been saying a few months volatility picks up when the market begins to sense that the fed is going to actually tighten. Youre saying volatility is not going to pick up for a long time. Right now fed fund futures say the fed will be tightening in about a year. There is something in the background that says that timetable needs to be advanced to where we are today. Could you see the uptick in volatility finally. You look at stocks, you get nervous about where bond yields are . They just dont want to go up for anything. We have been in the camp for some time the bond market is overvalued. Exceptionally winter cold weather influence, now the conflict in russia, the fed tightening out about a year, shortterm concerns are ruling the bond market. Were back next with the closing countdown. After the break, Td Bank Group ceo is, whether he sees the middle class rallying back or not. Back after this. Your 16yearold daughter studied day and night for her drivers test. Secretly inside, you hoped she wouldnt pass. The thought of your baby girl driving around all by herself was. You just werent ready. But she did pass. cause shes your baby girl. And now youre proud. A bundle of nerves proud. But proud. Get a discount when you add a newlylicensed teen to your Liberty Mutual insurance policy. Call to learn about our whole range of life event discounts. Newlywed discount. 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I think it is a nervous market. Geopolitics are here. Going into the close, we dont have much to buy on close. We look to the president making a statement immediately after the close. Thats 90 probably going to be about the ukraine. And if not, it will be about syria. None of those things is good. What were doing here is still taking a lead from europe. We come in, sold down with europe when europe didnt completely collapse. Came back in the afternoon on hopes. It will be a nervous market overnight. I think well continue nervous for couple of weeks. This geopolitical thing is going to hang around. Markets largely brush that off though, right . It has. And to tell you the truth, scott, i worry a little bit about complacency. You talk about complacency about the economy. But we all assume that these geopolitical risks are buying opportunities. Theyre shortlived i keep raising the question whether were too complacent about the whole thing. You close over 2,000 last week. Even with all of this stuff, even the word invasion being thrown around over in ukraine, the dow is only down 1 points. The aaii, the American Association of independent investors said that the amount of bulls in their survey is slightly over 52 . Last time that happened was christmas week and we peaked the week after and then had a pretty good rollover. So complacent and a little bit overoptimistic. Particularly with all this geopolitical stuff in the background. Funny, weve seen some bears capitulate in the last couple of weeks. Even this week though youve gotten some more of these hyperbolic cause. Right. 50 down are or whatever. Right, yeah. Art, be well. See you tomorrow. Art cashin, ubs. Dow goes out with a loss today on what is a fairly quiet trading day. Kelly evans has the second hour of closing bell. Welcome to the closing bell. Im kelly evans. Its been a historic week. S p 500 making new highs. We finish a rare down day on wall street. Dow giving up 40 points. Nasdaq about 12 and the s p giving up. Three. Yesterday we managed to turn green on the bell, more or less. Today not the case. 1996 looks like the closing level there. Joining me now on the closing bell panel, Michael Carlton from philadelphia trust company, cnbc contributor jon najarian and our very own michelle carusocabrera, and fast money trader guy adami. Welcome one and all. Hello that is a roudzi irousing he. As everybody knows, president obama is scheduled to begin speaking at 4 00 p. M. Hes not always right on time. Never has been on time. So whenever he does begin speaking well immediately bring that to you. In the meantime, dr. J, do you think this statement had anything to do with the market here not quite able especially on the s ps side to turn positive on the close . Yeah. I do. And i think that art was just talking about art cashin, that is whether or not theres that complacency in the market. There is a little bit of that certainly. But then again, this is not a nato country. As initial has said. The ukraine, you mean. Ukraine is not a nato country. It is not expected that any of us, of the western world, is going to be going in there to defend them. And theyre going against a very organized army and perhaps the secondbest in the world when theyre going against russia. So i dont think a lot of us have an idea that the outcomes going to be anything but one way, kelly. That said, michelle, what if nato gets more involved . I dont think thats possible. I know thats the one thing that would we want russia in mexico or canada . Right . Vladimir putin does not want a nato country right there on his door. Thats one of the core issues about what this is about. There are some diplomats who say the European Union was crazy to ever even begin to try to involve ukraine because they knew it was bring on putin. Ukraines going to try. In fact today they voted they want to try to become this like subpart of nato. Its not going to happen. But thats exactly it. In other words, i can see the risk being out there. The ukraine tries to move in this direction, that we feel some sort of pull towards action, even if it is in nobodys interest we didnt do it in georgia. Were not going to do it here. Its just another one of those you foe they make the jokes about what is a boat. A hole in the water you throw money into. This is the same thing. I mean are you going to try to save ukraine and the economy there . You cant. Theyre going to be cut off from fossil fuels. I think, earlier today they were saying nobody seems to care about this incursion, first into crimea and now into other parts of the ukraine. In other words, there are other countries looking over their shoulder and russia and perhaps indicating there should be more of an international in the only europe. Where is our Foreign Policy . Our Foreign Policy is almost absent from this entire debate. I wonder about that. The markets reaction to that is understandable. The market is concerned about it. But it is not really a problem for the market. What should it be . This is not an easy i think it should and problem because the ukraine is a very large russia around the ukraine are very large trading partners with europe. We dont want russia to dictate the terms. Thats what putins going do, he goes in and takes the Eastern Ukraine which is why we havent even much of a response from europe because of that economic relationship they dont want to put at risk especially when they are facing deflation. And draghi unable to do much about it. And winter is coming and russia controls the gas supplies for europe. I know thats what people keep saying is that theyre trying to find time until that point when they know theyre going to have more leverage well theyre out of time. Mondays september. They being the recipients of russias gas, you mean. Yes. It is in their best interests, russia we ths that do everything they can to get gas and crude oil, fossil fuels, moving to the up side because of the selloff that theyve had recently. Its not a surprise to let them openly let everybody see that theyve got armored columns moving into ukraine. I dont think thats a shot. We have an eu summit on saturday. There may be some kind of economic response there with more sanctions that could impact. Plenty of in the meantime have been saying watch qatar, watch even the u. S. When it comes to alternative ways to provide europe with its energy as a way to try an cut off some of russias leverage here. Were years away from being able to supply liquefied natural gas in that kind of quantity. We are. What about the qataris is it. I got to believe theyre at least that far off as well. I mean in other words, these ports dont get built and the conversion stations dont get built overnight. Theyre all on the books and theyre all being built but it will be a while before theyre live. There arent enough of them being built. Michelle, again i dont want to dwell entirely on this until we hear from the president and know whats happening, but just a final question. Whats turkeys role in all this . There are so many different crises on its doorstep. So interesting, right . And it is sort of this hinge country between europe and i think our involvement with turkey right now or the way everybody looks at turkey right now is related to kurdistan and Northern Iraq. Are they they are making it very clear that after being at war with the kurds for decades, theyre now starting to be a lot more pragmatic about the situation, helping the kurds get oil out of Northern Iraq . I mean that is a change that was inconceivable two years ago, three years ago. You think the change is due to the fact that turkey is now less secular and going to be becoming more fundamentalist . Well then they wouldnt be helping the kurds, right . Kurds are secular. But im saying, right, they wouldnt be doing that. There are reports that they are actually helping isis. Turkey. Its a mess. Its a mess. Thats why guy adami and everybody, whats an investor to do . Yo, hey is there a tactical move here. Is it one of these as weve heard over and over again that you kind of just have to ignore until it hits that crisis mode . Thats a good question. If people are out there investors. If investors are out there and theyre worried about this, clearly every time geopolitical risk has reared its ugly head the market has shrugged it off. But if you are having trouble going to sleep at night because all your money is in the equity market and you think its run too far, too fast, you can pick up the phone and say lets take a powder for the next couple months and see what happens. Worst case you miss a couple percent to the up side. Best case, the market watches, you get a chance to buy it back. People are convinced they cant do that. Theyve been bludgeoned in the fact that you cant pick up the phone and say maybe it is time to take a little money off the table. Also, doc will tell you, with vix and with rates not rates, with volatility as low as it is, this is a huge opportunity, if you are nervous to take some protection. Buy an insurance policy on your portfolio. Its a period thats almost without parallel in market history. Here we have a market thats allegedly high, although i can argue that it may not be high, in an era where we have Interest Rates that are 0 . So were dealing with a market that hasnt really come to this point ever before this point being what . Being a market thats fairly valued, that is with a 0 Interest Rate with no alternatives. Stop, stop with the no alternative. That stuff makes me crazy. I mean listen. Im all fired up, it is thursday. Yankees are in extra innings. There are alternatives. People say you cant be in the bond market. Guess what . Look at the tlt. Yeah, yields 2. 5 . 2 2. 4 . It is up 18 this year. There are a lot of alternatives. You can always sit in cash which dr. J probably is thats getting more and more painful by the day though. What about this point about buying protection . Others are arguing bob pisani has a nice note on this. Today, he says the real increase in volumes that we sell here on the exchange for years was driven by highfrequency trading. Thats coming out of the market. Maybe the decline we are seeing is just getting back to normal. Maybe we shouldnt be thinking about playing the vix quite the way that we used to. I think its just as telling of whats going on in the market as it ever has been. But i think, also, that youve got a situation where banks have been taken out through doddfrank and other measures. Theyve been pulled out of this speculative side which is probably a good thing if theyre using their Balance Sheet to leverage up, which they had been doing. So getting that volume off the table when you are talking big institutions means a lot. Gl do you notice this, michael, when you guys are in and out of investments hold that thought. President is stepping to the podium. President obama making a statement. Ill be saying a few words on a number of topics and taking a few questions before the long labor day weekend. First beginning with the number one thing that most Americans Care about, the economy. This morning we found out that our economy actually grew at a stronger clip in the Second Quarter than we originally thought. Companies are investing, consumers are spending. Over the past 4 1 2 years our businesses have now kree create nearly 10 million new jobs. But as everybody knows, there is a lot more that we should be doing that make sure that all americans benefit from the progress that weve made. Im going to be pushing Congress Hard on this when they return next week. Second, in iraq, our dedicated pilots and crews continue to carry out the targeted strikes that i authorized to protect americans there and to address the humanitarian situation on the ground. As commander in chief, i will always do what is necessary to protect the American People and defend against evolving threats to our homeland. Because of our strikes, the terrorists of isil are losing arms and equipment. In some areas Iraqi Government and Kurdish Forces have begun to push them back, and we continue to be proud and grateful to our extraordinary personnel serving in this mission. Now isil poses an immediate threat to the people of iraq and the people throughout the region, and thats why our military action in iraq has to be part of a broader comprehensive strategy to protect our people and to support our partners who are taking the fight to isil. That starts with iraqs leaders building on the progress that theyve made so far and forming an inclusive government that will unite their country and strengthen their Security Forces to confront isil. Any successful strategy, though, also needs strong regional partners. Im encouraged so far that countries in the region, countries that dont always agree on many things, increasingly recognize the threat that isil poses to all of them. Ive asked secretary kerry to travel to the region to continue to build the coalition thats needed to meet this threat. As ive said, rooting out a kaerns licans cancer like isil will not be quick or easy but im confident we will working closely with our allies and partners. For our part ive directed secretary hagel and our joint chiefs of staff to prepare. A range of options. Ill be meeting with my National Security council again this evening and we continue to develop that strategy. Ive been consulting with members of congress and ill continue to do so in the days ahead. Finally, i just spoke with chancellor merkel of germany on the situation in ukraine. We agree, if there was ever any doubt, that russia is responsible for the violence in Eastern Ukraine. The violence is encouraged by russia. The separatists are trained by russia. They are armed by russia. They are funded by russia. Russia has deliberately and repeatedly violated the sovereignty and territorial integrity of ukraine and the new images of Russian Forces inside ukraine make that plain for the world to see. This comes as Ukrainian Forces are making progress against the separatists. As a result of the actions, russia has already taken, and the major sanctions weve imposed with our european and international partners, russia is already more isolated than at any time since the end of the cold war. Capital is fleeing, investors are increasingly staying out, its economy is in decline. This ongoing russian incursion into ukraine will only bring more costs and consequences for russia. Next week ill be in europe to coordinate with our closest allies and partners in estoenia and i will reaffirm our commitment. At the nature toe summit in the United Kingdom well focus on additional steps we can take to ensure the Alliance Remains prepared for any challenge. The meeting will be another opportunity for the alliance to continue our partnership with ukraine and i look forward to continuing the unwaivvering commitment by the United States when i welcome president poroshenko to the white house next month. Im take a few questions. Im going to start with somebody who i guess is now a big cheese. Hes moved on. I understand theres going to be his last chance to ask me a question in the press room so i want to congratulate chuck todd and give him a first question. Im glad you said that in the press room. Let me start with syria. Decision that you have to make between first of all, is it an if or when situation about going after isil. Can you defeat isil or isis without that . How do you prioritize you said that assad had lost legitimacy to lead. Defeating isis could help assad keep power. Talk about how you prioritize those two pieces of your Foreign Policy. First, i want to make sure everybodys clear on what were doing now, because it is limited. Our focus right now is to protect american personnel on the ground in iraq, to protect our embassy, to protect our consulates, to make sure that Critical Infrastructure that could adversely affect our personnel is protected. Where we see an opportunity that allows us with very modest risk to help the humanitarian situation there, as we did in sinjar mountain. We will take those opportunities after having consulted with congress. But our core priority right now is just to make sure that our folks are safe and to do an effective assessment of iraqi and kurdish capabilities. As i said i think in the last press conference, in order for us to be successful we got to have an Iraqi Government thats unified and inclusive. So we are continuing to push them to get that job done. As soon as we have an Iraqi Government in place, the likelihood of the iraqi Security Forces being more effective in taking the fight to isil significantly increases. And the options that im asking for from the joint chiefs focuses primarily on making sure that isil is not overrunning iraq. What is true though is that the violence thats been taking place in syria has obviously given isil a safe haven there in ungoverned spaces. And in order for us to degrade isil over the long term, were going to have to build a regional strategy. Now were not going to do that alone. Were going to have to do that with other partners, and particularly sunni partners, because part of the goal here is to make sure that sunnis, both in syria and in iraq, feel as if theyve got an investment in a government that actually functions, a government that can protect them, a government that makes sure that their families are safe from the barbaric acts that weve seen in isil. Right now those structures are not in place. Thats why the issue with respect to syria is not simply a military issue. It is also a political issue. It is also an issue that involves all the sunni states in the region and sunni leadership recognizing that this cancer that has developed is one that they have to be just as invested in defeating as we are. And so to cut to the chase in terms of what maybe your specific concerns, chuck, my priority at this point is to make sure that the gains that isil made in iraq are rolled back and that iraq has the opportunity to govern itself effectively and secure itself. But when we look at a broader strategy that is consistent with what i said at west point, thats consistent with what i said at the National Defense college, clearly isil has come to represent the very worst elements in the region that we have to deal with collectively. And thats going to be a longterm project. Its going to require us to stabilize syria in some fashion and stabilizing syria in some fashion means weve got to get moderate sunnis who are able to govern and offer a real alternative and competition to what isils been doing in some of these spaces. Last point with respect to assad, its not just my opinion. I think it would be International Opinion that assads lost legitimacy in terms of dropping barrel bombs on innocent families and killing tens of thousands of people. And right now what were seeing is the areas that isil is occupying are not controlled by assad anyway. Frankly, assad doesnt seem to have the capability or reach to get into those areas. So i dont think this is a situation where we have to choose between assad or the kinds of people who carry on the incredible violence that weve been seeing there. We will continue to support a moderate opposition inside of syria, in part because we have to give people inside of syria a choice other than isil or assad. I dont see any scenario in which assad somehow is able to bring peace and stability to a region that is majority sunni and has not, so far, shown any willingness to share any power with them or deal in any significant way with the longstanding gree longstanding greefb longstanding grievances i have there. I have consulted with congress throughout this process. I am confident as commander in chief i have authority to engage in the acts we are conducting currently. As our strategy develops we will continue to consult with congress and i do think that will be important for congress to weigh in and or that our consultations with congress continue to develop so that the American People are part of the debate. But i dont want to put the cart before the horse. We dont have a strategy yet. I think what ive seen in some of the news reports suggests that folks are getting a little further ahead of where were at than where we currently are. Thats not just pie assessment but the assessment of our military as well. We need to make sure that weve got clear plans, that were developing them. At that point i will consult with congress and make sure that their voices are heard. But theres no point in me asking for action on the part of congress before i know exactly what it is that is going to be required for us to get the job done. All right . Mr. President , do you consider todays escalation in ukraine an invasion . And when you talk about additional costs to russia, are you ready at this point to impose broader economic sanctions or are you considering other responses that goes beyond sanctions . I consider the actions that weve seen in the last week a continuation of whats been taking place for months now. As i said in my opening statement, there is no doubt that this is not a homegrown indigenous uprising in Eastern Ukraine. The separatists are backed, trained, armed, financed by russia. Throughout this process weve seen deep russian involvement in everything that theyve done. I think, in part, because of the progress that you have seen by the ukrainians around donestk and luhansk, russia decided it had to be a little more overt in what they were doing but it is not really a shift. What we have seen though is that president putin and russia have passed by potential offramps to resolve this diplomatically. So in our consultations with our european allies and partners my expectation is that we will take additional steps primarily because we have not seen any meaningful action on the part of russia to actually try to resolve this in diplomatic fashion. I think that the sanctions that weve already applied have been effective. Our intelligence shows that the russians know theyve been affected, even though it may not appear on russian television. I think there are ways to deepen or expand the scope of some of that work. But ultimately i think whats important to recognize is the degree to which russian Decision Making is isolating russia. Theyre doing this to themselves and what ive been encouraged by is the degree to which our European Partners recognize even though they are bearing a cost in implementing these sanctions, they understand that a broader principle is at stake. So i look forward to the cons sultati consultations that well have when i see them next week. Zeke miller. In your response to chucks question you said you dont have a strategy yet but youll reconsider that Going Forward. Why didnt you go to congress before this current round of strikes in iraq if you do not believe that thats the case anymore, what you said last year, and throughout your career youve also said that you raids concerns with the expansion of powers with the executive. Are you concerned that your recent actions unilaterally have cut against that . No. And heres why. It is not just part of my responsibility, but it is a sacred duty for me as commander in chief to protect the American People and that requires me to act fast based on information i receive if an embassy of ours or a consulate of ours is being threatened. The decisions i made were based on very concrete assessments about the possibility that erbil might be overrun in the kurdish region and that our consulate could be in danger. I cant afford to wait in order to make sure that those folks are protected. But, throughout this process weve consulted closely with congress and the feedback ive gotten from congress is that were doing the right thing. Now as we go forward, as i described to chuck, and look at a broader regional strategy with an International Coalition and partners to systematically degrade isil hes capacity to engage in the terrible violence and disruptions that theyve been engaging in, not just in syria, not just in iraq, but potentially elsewhere if we dont nip this at the bud, then those consultations with congress for something that is longer term i think become more relevant. It is my intention that congress has to have some buyin as representatives of the American People. And by the way, the American People need to hear from what strategy is. But as i said to chuck, i dont want to put the cart before the horse and in some of the media reports the suggestion seems to have been that were about to go full scale on an elaborate strategy for defeating isil. And the suggestion i guess has been that well start moving forward imminently and somehow Congress Still out of town is going to be left in the dark. Thats not whats going to happen. We are going to continue to focus on protecting the American People. Well continue where we can to engage in the sort of humanitarian acts that saved so many folks who were trapped on a mountain. We are going to work politically and diplomatically with folks in the region and were going to cobble together the kind of coalition that we need for a longterm strategy, as soon as we are able to fit together the military, political and economic components of that strategy. There will be a military aspect to that. Anding it going to be important for congress to know what that is, in part because it may cost some money. Okay . Ill take ill just take couple more. Mr. President , do you regret moving on isis earlier . Some reports indicate most of the weapons, the weapons they have, they got them after the fall of mosul. Also the iraqi president said today that the iraqi forces are in no position to stand up to isis. Why do you think that forming a new government will change this situation . Well, once isil got into mosul, that posed a big problem because there is no doubt they were able to capture some weapons and resources that they then used to finance additional operations. Nd at that stage, we immediately contacted the Iraqi Government. Keep. Mind, we had been in communications with the Iraqi Government for more than a year indicating that we saw significant problems in the sunni areas. Prime minister maliki was not as responsive perhaps as we would have liked to some of the underlying political grievances that existed at the time. There is no doubt that in order for iraqs Security Forces to be successful, theyre going to need help. Theyre going to need help from us, theyre going to need help from our international partners. Theyre going to need additional training. Theyre going to need additional equipment. And we are going to be prepared to offer that support. There may be a role for an International Coalition providingal air support for their operations. But the reason it is so important that an Iraqi Government be in place is this is not simply a military problem. The problem we have had consistently is a sunni population that feels alienated from baghdad and does not feel whats happening. And does not feel as if anybody is looking out for them. If we can get a government in place that provides sunnis some hope that a National Government serves their interests, if they can regain some confidence and trust that it will follow through on commitments that were made way back in 2006, 2007, 2008, and earlier, about how you arrive at,example, debathification laws and give people opportunities so theyre not locked out of government positions. If those things are followed through on and we can combine it with a sound military strategy, then i think we can be successful. If we cant, then the idea that the United States, or any outside power, would perpetually defeat isis i think is unrealistic. As ive said before, i think i said it in the Previous Press conference, our military is the best in the world. We can rout isis on the ground and keep a lid on things temporarily, but then as soon as we leave, the same problems come back again. So weve got to make sure that iraqi understand in the end theyre going to be responsible for their own security and part of that is going to be the capacity for them to make compromises. It also means that states in the region stop being ambivalent about these extremist groups. The truth is that weve had state actors who, at times, have thought that the way to advance their interests is, well, financing some of these groups as proxies is not such a bad strategy. And part of our message to the entire region is, this should be a wakeup call to sunni, to shia, to everybody, that a group like isis is beyond the pale. That they have no vision or ideology beyond violence and chaos and the slaughter of innocent people. And as a consequence, weve got to all join together even if we have differences on a range of political issues, to make sure that theyre rooted out. Okay . Last question. Mr. President , despite all of the actions the west has taken to get russia to pull back from ukraine, russia seems intent on picking one step after another, convoys, transports of arms. At what point do sanctions for longer work would you envision the necessity of military action to get russia to pull back from ukraine . We are not taking military action to solve the ukrainian problem. What were doing is to mobilize the International Community to apply pressure on russia. But i think it is very important to recognize that a military solution to this problem is not going to be forthcoming. Now the fact that russia has taken these actions in violation of the sovereignty and territorial integrity of the ukrainians has resulted, i believe, in a weakening of russia, not a strengthening of russia. That may not be apparent immediately but i think it will become increasingly apparent. What its also done which has isolated russia from its trading partners, its commercial partners, international business, in ways that i think are going to be very difficult to recover. We will continue to stand firm with our allies and partners that what is happening is wrong, that there is a solution that allows ukraine an russia to live peacefully. But, it is not in the cards for us to see a military confrontation between russia and the United States in this region. Keep in mind, however, that im about to go to a nato conference. The ukraine is not a member of nato. But a number of those states that are close by are. We take article 5 commitments to defend each other very seriously. That includes the smallest nato member as well as the largest nato member. And so part of the reason i think this nato meeting is going to be so important is to refocus attention on the critical function that nato plays to make sure that every countrys contributing in order to deliver on the promise of our article 5 assurances. Part of the reason ill be going to estonia is to let the estonians know that we mean what we say with respect to our treat yaobligations. We dont have those treaty obligations with ukraine but we do stand shoulder to shoulder with them and were doing not just a lot of work diplomatically but also financially in order to make sure that they have the best chance at dealing with what is admittedly a very difficult situation. All right . Thank you very much. Thank you, guys. Thank you. President obama delivering a statement in which he discussed the situation. How does executive Decision Making impact your decisions let me just say this. Ive been very clear about the fact that our immigration system is broken and needs to be fixed. And my preference continues to be that congress act. I dont think anybody thinks that congress is going to act in the short term, but hope springs eternal that after the midterm elections they may act. In the meantime, what ive asked jay johnson to do is to look at what kinds of executive authorities we have in order to make the system work better. We have had a lot of stake holder discussions. That set of proposals is being worked up and the one thing that i think has happened was the issue with unaccompanied children that got so much attention a couple of months back. Part of the reason that was important was not because that represented a huge unprecedented surge in overall immigration at the border, but i do think that it changed the perception of the American People about whats happening at the borders. So one of the things weve had to do is to work through systematically to make sure that that specific problem in a fairly defined area of the border that were starting to deal with that in a serious way. And the good news is weve started to make some progress. What weve seen so far is that throughout the summer, the number of apprehensions have been decreasing. Maybe thats counterintuitive but thats a good thing because that means that fewer folks are coming across. The number of apprehensions in august are down from july and theyre actually lower than they were august of last year. Apprehensions in july were half of what they were in june. So were seeing a significant downward trend in terms of these unaccompanied children. What that i think allows us to do is to make sure that those kids are being taken care of properly with due process. At the same time, it has allowed us to then engage in a broader conversation about what we need to do to get more resources down at the border. It would have been helped along if congress had voted for the supplemental that i asked for. They did not. That means weve got to make some administrative choices and executive choices about, for example, getting more Immigration Judges down there. So that has kept us busy but it has not stopped the process of looking more broadly about how do we get a smarter immigration system in place while were waiting for congress to act. It continues to be my belief that if i cant see congressional action, that i need to do at least what i can in order to make the system work better. But some of these things do affect timelines and were just going to be working through as systematically as possible to get this done. But have no doubt, in the absence of congressional action, im going to do what i can to make sure the system works better. All right . Thank you. A final statement about immigration policy, president obama otherwise spending most of this friday afternoon statement talking about iraq, russia and the ukraine. John harwood joins us now with more on what is this, the second week in a row now where the president has spent a considerable amount of time on a friday afternoon discussing these strategies. I believe it is thursday, kelly. Correct me if im wrong. But i do think the president felt the need to address the two huge Foreign Policy crises in front of American People. On you a crane and russia he said forthrightly we will not be taking military action. He tried to tamp down the idea that it is a sharp break what the russians today. He said it is a continuation. If he described it as a sharp break there would be more pressure on the administration to do something much different and he doesnt seem prepared to do that right now. In terms of isis, iraq and syria, he indicated he was going to continue doing what the United States has been doing to limit isis within iraq to give iraq the space to govern itself. But talked about a regional strategy, a broader strategy in syria itself. Again, tamping down the idea that the United States is going to go to war. He also, as you heard at the top, took credit for the 4. 2 gdp growth in the last quarter. Little bit higher than had been forecast and he closed out by saying he was going to act on immigration if congress doesnt. A wide variety of subjects that he addressed. John harwood, thank you. I can confirm it is thursday, not friday afternoon. John harwood from washington for us this afternoon. We will be right back with more closing bell after a brief break. T t new car smell and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. 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Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. Welcome back. Buying or selling a house can be a stressful experience. But online realtors, redfin,s ceo is with us. Welcome. Thank you for being here. Listen, we want to just start going back to the issue of how the Housing Market is doing. Is it improving . Collapsing . Can you give us a sense from the sales data that you see as to whats happening. Out there . Well, i think the Housing Market has been worse than most people realize through the first half of the year. But over the past four weeks, its really improved. So once investors left the market in early 2014, others consumers werent willing to step up. We saw significant decrease in demand. We saw more listings reducing their price. But just over the past few weeks the market has come into balance and weve seen more buyers come into the season very late. Thats been a very encouraging sign. Glenn, about how long normally the people who have to move to have their kids in school and so forth needed to buy that house several months ago so those arent the people you are talking about right now. But how much do you think the impact has been of rates coming back down over the past four weeks that you cited . I think its been a significant factor. We first saw demand slow when there was a rate shock late last year. People never really came back. So that combination of slightly higher rates and significantly higher prices had many buyers stepping back from the market. In previous booms you would see people say whatever i have to do to get into a house, thats whatvy to pay. Watch word for 2014 has mostly been around discipline where people say id rather go out to eat, rather go on vacation. I dont want to be house poor and excuse me, house rich and cash poor. I think folks have really been careful about it. But as rates have come down and prices have modmoderated, fewer bidding wars an more people are coming into the market. Do you see it as a regional phenomenon . In other words, certain regions in the country are doing better than others and how have the banks barparticipated . Are they loosening up on extending credit . There are definitely different markets. Silicon valley has never stopped booming whereas other markets have really been slow earlier in the year and are now picking up. Seattle would be an example of that. Washington, d. C. Cooled earlier in the year and is now hotter. We expect banks to loosen credit. Thats not happened to a great extent. But to some extent. Further we get from the mortgage meltdown and crisis 26 how to 8, the market will start to ease. Are cash buyers still pretty prominent in the market . They are, but less so than they were. In 2013 13 you saw an enormous number of cash buyers outbidding all of the conventional borrowers. This year i think most of the investors have left of the building and really its regular consumers competing with one another to the extent theres competition at all. And often they are borrowing, not just using cash. The exception would be in the lowest third of the market when are you looking at 200,000 houses, 150,000 houses, theres still plenty of cash on the barrel. Thats so interesting. At least here in new york city you associate the cash buyer with flight capital, russians, chinese, et cetera. Do you have any insight into when you look at those cash buyers you intimated a lot of them were mostly investors. But how much of that do you think is also the fact that so many Chinese People want to get their money out of that country . Well, thats happening, too. But i would say thats mostly focused in the california market. Thats where weve seen the most chinese activity. Then in miami weve seen some rgs mon russian money and some latin american money. But in the rest of the country where we see the cash deals are still in the 200,000, 150,000 price point where you dont have wall Street Investors buying properties but you do have mom and pop investors who are taking advantage of fairly high rental rates, buy a property, and then go ahead and rent it out. Thats such a point, a big trend we are seeing. Please come back and talk more about the disruption, too, that the entire industry is feeling. Ahead, is the u. S. Retail still betting on stocks . Retail investors, that is. One banks earnings suggest they are. Td Bank Reporting its Td Ameritrade business income was 518 million in the Third Quarter, up 4 from a year ago. Ceo, ed clark, is coming up on a cnbc exclusive to discuss those results and the strength of its investors. Turbo . Because we like giving you power, but we also like giving you fuel efficiency. Like the sporty jetta. And the turbocharged passat tdi® clean diesel. Okay. And the iconic beetle. And the powerful tiguan. Okay you cant forget the cc. Guys, this is going to take a while. Get a 1,000 reward card on new 2014 turbo models or lease a 2014 jetta se for 169 a month after 1,000 bonus. Ends soon welcome back. Here is a look at shares of td bank down a half a percent today. This after posting a beat Third Quarter earnings this more. For more im joined in a cnbc exclusive by Td Bank Group ceo ed clark. Ed, great to see you again, especially since youre retiring in november. What did you think, especially about the investor demand if youret your Td Ameritrade product. Theyve been very good. As you mentioned, this is my last quarterly call so its great to have it on a high note. If you adjust for the insurance charge that we took last year, our earnings are up 8 this year and our earnings per share are up 10 this quarter, and we had each of the three quarters, this is our Third Quarter we had record earnings. Its good to go out on a high note. Thats not always the way it turns out but it turns out well for me. How important is a smooth leadership transition at a time when, by the way, more and more people are becoming concerned about some of these economies like australia, like canada given whats happening with mining and commodities out there. Yeah. So we did we announced our transition well over a year ago so were kind of stay as you go company. We plan these things well ahead. So its been a long process, and weve had a terrific run. Were the best performing bank in terms of total shareholder returns in both canada and the United States during my tenure. So weve had a good run, but we now have, you know, a ceo thats going to take over for me thats a fantastic person, been with the company all the way through, been my partner all the way through, and hes backed by phenomenal Management Team. Im pretty relaxed by the future. We know the canadian bankses have performed well. What about any acquisitions in the future. Does canada after losing tim hortons have to be worried about td bank . I dont think we have to worry about that. We have Strong Capital and more importantly a very strong ability to generate new capital. I think, you know, well continue to look for small acquisitions. I wouldnt see us doing anything big but i think we will continue to do some fillins, but the big focus we have is that we have a Better Business model. You know, we had 13 growth in commercial loans this quarter. We take market share, both deposits and loans every single quarter, and thats because we just focus on the customer and doing what they want, and because of that, we take market share. And you guys have had some of the innovations across the Banking Industry we witnessed for years now including free checking accounts and then some of the branch innovations weve seen. New york i think is an area youre going after right now, but what else can you tell us, is it mobile banking . Where are you putting the investment dollars to Work Together . Well, we believe in the omni channel approach. So were still adding stores into the United States, but, you know, we want to complement that with great mobility products, great call centers, and its really then running an integrated model so that the customer gets to go to the Distribution System of their choice at that time. You know, 24 x 7, 7 days a week. Our branches are open 7 days a week. Its putting that all together and then backing it by great people. I dont know whether you had a chance to see our youtube video. We had our atm surprise and delight our customers. Oh, yes. That was a sensation. More than 10 Million People have hit that, and i think it just picks up what creating a Different Bank culture built around the customer and more importantly, frankly, built around your front line employees who make that experience real every single day. Well, ed clark, thank you for being here. On the back of that quarter, as you look to make that transition in november, really appreciate your time this afternoon. Ed clark, the ceo for a few more months of td bank. Tomorrow is the last trading day in august. Find out how the panelists position their portfolios. Well be right back. We build it in classrooms and exhibit halls, mentoring tomorrows innovators. We build it raising roofs, preserving habitats and serving americas veterans. Every day, thousands of boeing volunteers help make their communities the best they can be. Building Something Better for all of us. Open port twentytwoohoneseven on the firewall for customer db access. Install version twopointthree of db connector and ensure verbose flag is set in case of problems. clapping sound isnt the cloud supposed to make business easier . Get the one that can connect to the systems that you already have. Today theres a new way to work. And its made with ibm. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage, or major disaster, when you need us most, were there. State farm. Were a force of nature, too. [ male announcer ] during the cadillac summers best event, lease this allnew 2014 cts for around 459 a month or purchase with 0 apr. Hurry in this exceptional offer ends soon. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Welcome back. Time for a final thought with the panel. Circling back to remarks from president obama, michelle, that we just heard . We dont have a strategy yet on isis. I think thats the big headline and it probably is whats on the front page of the newspapers tomorrow. All the same its the Russia Ukraine situation that most investors were focusing on. With the reporters you get a sense of general media interested in iraq, Business Media interested in ukraine. Anything you heard change what youre doing . No and for the next quarter i dont think it will change and thats focus in on fossil fuel. When russia cuts western europe off, they will scramble for it. Couple names . Im in Diamond Offshore in terms of a name thats been beaten up and people are looking to help them get into deep water drilling. Any of the u. S. Fracking names like emes. And michael, in just two final seconds, september typically a tough month for the market. Are you worried . I think tomorrow will be a tough day. No strategy means a tough market but the market is in a point where its concerned about the macroeconomic issues but doesnt consider it a problem. As long as they remain a concern and not a problem, the market can power ahead. Thank you all this hour. Fast money coming up in a few moments with melissa lee. Whats on tap . You know, we all tweet about what is coming up on the show during the day. Today i sent out a tweet, you would not believe the vitriol on twitter i got because were going to have the an lips that downgraded gt advance. They make sapphire glass. Downgraded the stock. A lot of people, got them fired up. I wondered if it would be apple because every time we talk apple, people say stop talking about apple already. Well, got to address it. Its almost a triple in the past year. Wow. All right. Over to you. Fast money starts right now. Live from new york citys times square, im melissa lee. Dan nathan, steve grasso, brian kelly, and guy adami. Straight to our top story. Low rates and market highs. How long can the two coexist . You flagged this chart for us today. It shows the final stages of a bull market begs