Welcome to squawk alley. Were at post 9. Jon fortt has the morning off. Were watching the markets after yesterdays selloff. Average. Announcer pressure following the second worst day of the year for the dow and s p 500. Nasdaq coming off the third worst day of the year and on track for the first four week loss since 2016. Bob pisani watching all of that on the floor bob . The question is are the markets in trouble here . The answer is not yet. But there is some cracks developing so weve seen something in the last two weeks we havent seen in a long time a selloff last week and another one this week. Thats starting to do some technical damage several elements have really come together. So first, theres leadership doubts about President Donald Trump emerging and the ability to get tax cuts through. Traders have been alarmed by the dramatic decline of the small cap rustle 2000. Its down 7 from the historic high about a month ago so its now flat for the year. With the s p 500 up 8 for the year the russell is almost all companies with earnings in the u. S. So it looks like some are downgrading the hopes of pro growth policies coming from the Trump Administration look at that that is a one month chart. The stock market is not cheap. Leadership looks a little tired. This is a valid point. Amazon, for example, 11 off the high but still up 28 for the year. That is essentially side ways for months now and the argument to buy cheaper value stocks, i heard this for two weeks now like energy and retail, that is a very tough sell a lot of people have been burned badly in the groups. Banks may be a possibility third, earnings may be topping a lot of debate about this the s p 500 is only expected to post earnings gains after single digit gains. 12 the Fourth Quarter still out. There finally, the Federal Reserve which has been a help for us for years in the markets, is mostly neutral for stocks so the next few days are going to be important. All that year people have been set to buy the dips. There hasnt been much of the dips weve had a huge run in the market now maybe the time to get a modest pullback. What does that mean . What is a pullback in this context, 5 will be notable. That would bring u. S. Stocks back to the levels we saw in may. Carl, that seems like a long time ago sarah, 5 pullback will bring us to 2356 on the s p 500 thats about 70 points away. Look what is happening today were very quiet so the market moves if there is some rumors or news like cone or like barcelona but when you take away that and dont have anything there, its pretty quiet the nakt wefact that were notg an acceleration in selling or heavy volume today, i think thats a positive sign for the market stability right now back to you. All right bob, thank you very much for that david joins us as well. Jack avlin, happy friday to you both thank you you, too. Jack, to bobs point about lack of a spike in volume. Lack of tape bombs you have some financials in the green today. Do you think were Holding Stable here . Yeah, it seems that way you know, there is certainly no new developments in washington my guess is investors are still assessing the overall situation. But, yeah, i expect some stability here and really what bob said about the fed i think, you know, we have to remember that as long as inflation remains low, i dont think the fed is really going to act up too much to the upside on tightening david, what are you hearing from your clients . Is this bearishness . Profit taking . How do you view what were seeing this week and last . Theyre hearing theyre lo g loving the vacation and beach. Were not seeing, absolutely zero panic absolutely zero aggressive selling across the board volumes are incredibly light clients are being super patient. Actually the pullback in certain cases are looking for opportunities to buy but most of the funds, a lot of the hedge funds in general have grossed down a lot of people are taking vacation here the next couple weeks. I think its going to be quiet and to the point earlier that somebody made about the volumes being low and i think it was bob pisani and something coming out regarding, you know, gary cohen, what have you. It could shock it a little bit in one direction or the other. Ultimately, sarah, were not seeing the panic pr people are not so concerned about a market crash here. You know, a healthy pullback, sure absolutely bob mentioned, you know, roughly a 5 pullback from the highs i could see that occurring that is not an issue at all. People welcome that i think the dip would be bought aggressively. You look underneath the surface, however, you know, investors are writing off a lot of these pro growth legislation programs the fact that small caps, for example, have unwound virtually everything that they all the advantage that they had since the election suggests that Corporate Tax reform is off the table. Is that priced in they suggest that personal income tax rates probably are not coming down. But i guess the question i would ask, is that even priced in is the market factoringing in tax cuts no. I dont believe they are were not. 75 is off the table. Right so off the table we took it out of our base Case Scenario for next year i say the market gave it a pass to q1 next year its not factored in if you look at s p earnings its roughly 140 odd dollars, right . What is the multiple on that 1765 you know, roughly here thats not super high. You add in the 5 to 6, i think j. P. Morgan put in a note on this you get some tax relief, it brings you, what, 17 times i dont think that is crazy expensive. I dont think there is a why is the Market Selling off then its just its simple consolidation. Its youre going to get ebbs and flows in the market. Its not health dwroi go straight up. Well pull back. Volumes are light. Its very tempermental someone throws out a headline about dairy cohen resigning and bids cancel out of systems and the market folloalls out a litt bit. There is not accelerated selling, there is really no depth from the market on the buy side people are really away on vacation and sort of made bets and walk ago way from it for a little bit i go ahead im sorry. I was going to ask you, do you go away with the way david paints the mood right now . And weve been asking guests all morning long whether or not the cash balances are changing materially do you expect them to change materially over the next month and a half i dont think so. We are underweight u. S. Equities because of the valuation relatively high valuation. But we still overweight International Developed and emerging well likely hold those positions. But, you know, we have heard you know, we have a lot of private clients and some retirees have voiced a little concern. You know, given the market up so much but, no, we havent changed our allocation focus mike, my only last question, david, ill put it you to, you see this as a sort of august consolidation. Last week we heard that the president of the United States threaten fire and fury with north korea. Huge question mark how that gets resolved and what is going to happen there we have the continued terrorists activities and threats like we see across europe like we got a reminder yesterday in barcelona. We have more doubts about the trump stimulus plan. Youre saying this doesnt change the picture for you Earnings Growth very solid. When you dial back and look at what is the sort of black swan events, what are the three key events that can derail the market sure, all out war would derail the market, no question. The sort of nonsense going back and forth in north korea, well hear that for a very, very, very long time. Weve been hearing it for awe very long time i think the market has become a little more immune to that then i look at the sort of, you know, structure in d. C sure, a complete breakdown of structure meaning impeachment to the president or something extremely aggressive would derail the market from a crash perspective. You look at gary cohen, he is not going to resign. Hes not walk ago way from the tax relief that hes getting from his you know, the savings that hes getting from he leading Goldman Sachs no one is going to walk away from that you wouldnt, carl and sarah. I wouldnt either. I look at it and say i can make a bet and i think my bet is probably spot on and say if im the betting man and i am, gary is not going to walk away from that tax savings you know, maybe he goes into a different area hes not walking away. That risk is off the table so its all out war. Its a massive shift in d. C. There is some real shift to the Growth Perspective will we have ebbs and flows . Absolutely are i think theyre going to be bought aggressively. Were going find out next week hopefully a little more from yellen in jackson hole. Jack, david, have a good weekend guys thanks you too good debate when we come back, is tech backed into a corner why both sifdz the political divide have the valley in the sights well discuss. Then foot locker, getting slammed today. Well talk about the results and later cnbc exclusive with the ceo of Applied Materials at fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. Livestreat the airport. E sport binge dvrd shows while painting your toes. On demand laughs during long bubble baths. Tv on every screen is awesome. The Xfinity Stream app. All your tv at home. The most on demand your entire dvr. Top networks. And live sports on the go. Included with xfinity tv. Xfinity, the future of awesome. Two more high profile ceo is james mur doch and starbucks Howard Shultz taking a stand against hate speech. We also got actor cal penn tweeting 16 members of the president s committee are resigning, all but one john harwood is watching all the defections in washington. What were seeing is a dawning on Corporate America that the Trump Republican Party may not be good for business after all. Theyve been counting, as you know, ever since the election on tax cuts, deregulation, a pro Business Environment but there are a couple things that i think are worth talking about that underscore the difficulty of that first of all, on the blue collar populism that is taking over the Republican Party has changed both parties if you summarize the trends, it will be republicans have gone down scale in their base democrats have gone upscale. What that means is a majority of republicans now say free trade is a bad idea. You also see that reflected in president trumps desire to cut legal immigration. As well as illegal now you also have a Republican Party that remains aligned with business on things like tax cuts and deregulation but the republicans have not shown the competence to run the government adequately to deliver on those things. Thats why you see after health care that there is increasing pessimism that tax cuts can actually be enacted. Finally, you have the question of values which is related to the shift in the basis of the parties. Corporate america tends to embrace tolerance, diversity but the blue collar populist that donald trump has started that, is very difficult for business were seeing that play out right now. Is Silicon Valley more vulnerable here, john . There was a piece this morning about how theyre feeling the heat on the right and left because of views and size and changes in the industry. Theyre vulnerable. But also, i mean, everybody recognizes that the Tech Industry is a very powerful and influential industry for the future of the American Economy and so in that way, i think theyve got some protections, some reputational protection by virtue of who they are but they represent even more than other elements of the Business Community that social progressivism. If you look at the most recent poll, president trumps Approval Rating among Young College graduates, 20 those are the people that the Tech Industry speaks to. John harwood, thank you very much with more on the trump ceo relationship and Silicon Valleys take, lets bring in managing partner Jeff Richards here on set, jason delray. Good morning to both of you. Happy friday you have been writing about this at recode as well. The fact that there is political pressure and increasingly heated rhetoric from both sides of the aisle against some of the big Silicon Valley companies does that impede their ceos from speaking out or from companies from taking action after what we saw in charlottesville i think there is a fine line here but for me the most important thing is when they do take action against a Certain Group or event or type of speech, that they are consistent with their policies and right now, you know, there are people saying theyve been inconsistent, facebook maybe with inconsistency on policies, twitter as well. And so thats when they open themselves up to real potential you mean hate speech . Hate speech, organization of events on their platforms. Fake news fake news for sure. And so, you know, thats what i think thats what were looking at really closely k they be consistent in how they take action and if not, they open themselves up to a lot of risk is that a fair criticism that some of the politicians have, jeff i think it s and jason is obviously one of the smarter folks on this topic. One of the challenges you have is we have never really seen this before. Weve never seen sort of the moral compass of our country placed in the hands of private Business Leaders one reason youre seeing that is because many of us would argue that our president is tending to go back and forth on various things and, so you know, increasingly youre seeing organizations like the aclu or the Electronic Frontier foundation may play a role as we go forward. Its an interesting time we never really seen this before where Business Leaders are asked to step forward and set policy for our country. Its kind of an awkward situation all around what kind of action are we talking about here antitrust what sort of what capabilities do the regulators have to reign in on these companies . Theres always going to be an increasingly so antitrust lens being put on some of the bigger companies. Google obviously one of the foremost ones. Amazon is obviously in the target and sort of the bulls eye of trump and, you know, a long time ago it seemed like microsoft, the microsoft antitrust allegations wouldnt go anywhere. And they did so i think these companies are watching it really closely for jeff bezos, he keeps showing up in a room even though hes a target it seems like weekly of donald trump. Does shah ththat have something with antitrust its something theyre looking at closely. We also want to check in with alibaba. It is moving higher following yesterdays earnings beat. The stock up is more than 80 so far this year. Is this an alibaba story or an ecommerce trend as a whole, jeff i think its both alibaba is a phenomenal organization that executed flawlessly since going public. You look at 56 year over year growth i cant think of a time in the last ten or 20 years where ive seen a 30 billion Company Growing at 50 , 56 year over year, 540 billion in annual gmv last year in china the fiscal year which is larger than the entire ecommerce market in the u. S. But i think if you look globally, were still in the infancy of ecommerce taking over retail in the u. S ecommerce i believe is 12 or 15 of retail. So were in the first inning one reason im long alibaba, weve been an investor for a very long time, it is still early. The chinese consumer, look at the value of a consumer on this platform, it is small to where you may see amazon if you think about the chinese economy growing tremendously over the next five or ten years, eventually becoming the number one economy in the world, alibaba benefits from that as does ctrip and the other major internet players in china. So i think were in the you know, the numbers are big. Growth is phenomenal were still in the first or second inning of this transition from physical retail to online given what steve said this week about economic war in china. Whether he stays or goes, is that material to how these Companies Fair and how the stocks trade do you think . Not that youre a sales write analyst. Yeah. I mean there is always a little bit of a china discount. It has gone up and down over the years. You look at jd and amazon i mean alibaba and tencent there is always been a weariness among u. S. Investors to really take large positions in those companies because they dont totally understand what the relationship is between the Business Community and china and the government and i think as those Companies Get stronger and stronger and have a more of a global reach, perhaps youll see more u. S. Investors look to be part of those. One of the unwritten stories is how those companies are moving after southeast arab yachlt you have another population with hundreds of millions of people untapped online, mobile payment, social immediate yashgs ecommerce are going to be enormous how they lay with the u. S. Is interesting. Right now think about the u. S. There are six billion people in the world. Were relatively small percentage of that i think if you talk to executives at tencent or alibaba, they tell you the u. S. Just isnt a big focus for them. Theyre focused on europe, latin america, southeast arab yashgs markets where there are billions of people that have little brand loyalty online jason, what were you going say . Thats why every time, you know, ebay or alibaba rumor come about and which i hear probably every three to four months, i think to myself first, there is still so much room for growth within china not only for alibaba and jd and internationally. We see big bets being made in india, other parts, Southeast Asia with a lot of penetration still to go. And these companies, you know, it seems to be that they have their eyes there before any big moves in the u. S and i think thats a smart play. Jeff, finally, increasingly, investors are wondering what is the biggest best, amazon, baba or walmart who is seeing 60 growth on a quarterly base nis ecommerce i think what Doug Mcmillan did at walmart is brilliant. People were throwing up their hands wondering if walmart was dead in the water and going to lose the race to am zovenlt they spend 3. 3 billion on jechlt you look at walmarts market cap increased by well over 3. 3 billion the question is what are the other retailers going to do . Target lost 15 billion in market cap you look at macys that have been decimated over the last few years. So what is the rest of u. S. Retail going to do there is another story in ecommerce that doesnt get a lot of attention which Companies Like wicks, square, godaddy. These are companies that are sort of selling, theyre the arms merchants of ecommerce i think that is an interesting play if you really believe that were in the first or second inning of the transition from off line to online, go play those other bets that are tied to the rise of the nonamazon ecommerce be long amazon and also look at the other players that were selling the picks and shovels to the brands and retailers that are eventually going to come online well leave it. There thank you. Have a great weekend Jeff Richards, jason delray. Thank you see you next time. When we come back, shares of foot lock rert big victim in retail today on pace for the worst day since november of 2008 almost a 27 decline its dragging down the likes of nike as well the worst dow performer this morning. Under armour hitting all time lows dow is pairing losses here down 63. Where to get in. Where to get out. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Going somewhere . Whoooo. Heres some advice. Tripadvisor now searches more. Than 200 booking sites to find the hotel you want and save you up to 30 . Trust this birds words. Tripadvisor. Foot locker getting crushed right now after posting results that missed expectations on earnings and revenues. Samestore sales falling 6 for the quarter. The expectation was a rise of 1 for more, we are joined by oppenheimer managing director and aaron murphy joining us on cnbc news line anna, foot locker had been pretty resill yenlt amid all of the retail pain. The ceo was on this show not too long ago saying traffic was holding up and now we see the worst comps since 2009 what happened . Yeah. So as were learning again and again in retail, its never just one cut. Unlike really most in retail this company has enjoyed positive traffic trends. Really up until now. This is only the Second Quarter that theyre seeing traffic decline pretty substantially and profitability of the business is such that they do need positive comps to continue to see margin expansion. They talked about some of the trends in addition to sten smith and superstar franchises now declining. But also nikes seeing some challenging trends in basketball as well and that, of course, is a big negative for them. Are they right, erin, to blame some of these sneaker makers and releases and the reception to the releases or is there a bigger problem here that the nikes and adidases of the world are selling more direct to consume eastern not thinking as much about the foot lockers of the world . Thanks so much for having me on we think its more of the latter, sarah. The Biggest Issue we see for foot locker and some of the other brickandmortar retailers right now in the athletic space is that the consumer dollars are shifting towards digital platforms of the vendors so we estimate that over 100 of the dollar growth in athletic in 2016 came from the Online Shopping and their own stores. And thats a very significant shift for some of the direct for some of the multibranded retailers that are now facing to annas point not only significant traffic declines but also trying to, you know, kind of cut costs quick enough to maintain some of the margins erinn, you know, foot locker is down well in the past 20 today. And its been pointed out that the street had 15 buys, 8 olds and no sells and i just wonder whether you think the sell side has sort of Situational Awareness in this sector right now good question look, theres a tremendous amount of Consumer Behavior shifting far more rapidly than i think Management Teams thought and sort of the street in general participated you know, clearly in a day like today whether you see comps pivot so quickly, the first negative comp since 2009, i think a lot of people are going back to the well and seeing what retailers have to maintain relevant vancy here. From our perspective, you know, clearly there is a sneaker culture that surrounds foot locker but the headwinds likely dont moderate at least in the near term here because some of those, you know, moving on or that Consumer Behavior moving towards digital platforms you dont see that abating at this point right now. So we need to go ahead and reduce the estimate sizebly this morning and adjust our price target as well what about nike and under armour, they are down 3 is that deserved i think nike is very negative foot locker as percent of nike is as much as 20 . 15 to 20 in north america. It is certainly very significant chunk. Jordan brand has been very resill yenlt for many, many years. This is the first time that foot locker Management Team called out weakness in jordan as well so we think that makes sense for the nike stock to be affected about think. Nike has been extremely resill yenlt for some time and huge outperformer year today. Under armor, of course, we still struggle how that brand fits in given the retro trend going on in the landscape right now and weve been seeing foot locker allocate more space we think that lateral is warranted. Under adidas adrs are down 1 i would note so aarerinn, people say this ish end of athleisure, is that fair to say or bigger changes going on we think from an athletic market perspective, the bigger changes we mentioned, Consumer Behavior moving from some of the traditional bricks and mortar to the on line platforms. The category we still think is healthy. But what is driving some of the pressure on the promotional side is there is a significant leadership rotation from nike towards adidas it is one of the top picks we think that strength of this brand is having far extends the superstars its really bin ovation and thats what they have driven so whether it is the boot technology, mmb platform which is new, we think that fits and some of the retailers are having a tough time keeping up with how quickly the consumer demand has shifted from one brand which was nike at the dominant one towards adidas which is the rising one all right youre both in agreement there thank you for joining us to talk about foot locker. The value is getting cut by a third right now. Nice to see you. Nice to see you. Great to be here. Europe closing here as we see the markets in the states sharply pair their losses. Lets get to seema mody. European stocks following for a second straight day. Led by the travel and leisure sector following that deadly terror attack in spain remember, past terror events have impacted foreign travel to europe take a look at the airlines, discount carrier among the biggest losers along with International Consolidated that is the parent of British Airways and Spanish Airline iberia air france lower by 2 as well as for hotels, melia of spain is down 2 . Intercontinental hotels also lower down by. 7 . If the travel and Tourism Companies that are feeling the pain tui, thomas cook under pressure. Tourism, an important part of spains economy and making up about 11 of the countrys total gdp. According to the travel website, barcelona is the fourth most popular european summer destination behind paris, rome, and dublin well see if travel trends will be impacted by the latest barcelona attack carl, back to you. Seema, thank you so much. Seema mody back at hq. Lets get a news update with sue herrera. Thank you very much. Heres whats happening at this hour, everyone a man stabbed several people in finlands western city before police shot him in the leg and detained him authorities were looking for more potential suspects. Emergency crews have blocked off an area in the citys center three days of mourning beginning in madrid for the victims of that terrorist attack if spain secretary of state Rex Tillerson announcing that an american citizen was among the 14 People Killed in the attack we have now received word and confirmed the death of one american citizen in the terrorist attacks in spain amongst those who have been killed were still confirming the injuries and deaths of others. But obviously we express our deepest sympathies to the loved ones of this individual. Nasa successfully launching a delta 5 rocket this morning. The unmanned spacecraft carrying a tracking and data relay satellite into orbit it will help support ground to Space Communications into the 2020s. Back downtown to squawk alley. Carl sue, thank you very much. When we come back, an exclusive with the ceo of Applied Materials. That stock higher after earnings we have paired our losses on the dow by 50 points Applied Materials raising guidance for more on the quarter, we are joined by the president and ceo of Applied Materials, Gary Dickerson. Good morning. Thank you, carl best quarter in 50 year history. I mean, you dont get to put that at the top of a release every time no. Absolutely every advance Semiconductor Device and display in the world is made with our equipment our markets are strong and getting stronger our ability to enable innovation thats shifting Major Economic value and large markets has never been better. And also our ability to deliver Earnings Growth in cash growth has never been better. We Just Announced our fifth consecutive quarter. And almost 1. 4 billion in cash. Theres never been a better time to be an investor in Applied Materials. You talk a lot about really broad changes, in fact, you say our markets are growing with a broader set of demand drivers. Thats much different than talking about various points of the cycle of inventories, right . Oh, absolutely. Absolutely if you look at the semiconductor industry, if you go back maybe ten years ago, it was really driven by pc and enterprise. And then around 2010, mobile and social media that was driving our market and its been up and sustainbly higher and much less volatile since 2010 and now what you see is huge economic value shifting in Major Industries iot, big data, cloud computing, smart vehicles, many, many huge shifts in technology and Applied Materials is really at the foundation of that innovation. And so many of your peers and competitors are as well. Its amazing to watch this entire grub thinking nvidia and Lamb Research and so many of the other chip makers. Many were looking in your are release for a peak in this cycle. They didnt ghaet in your report wlachlt you would say to investors wondering how long this is going to last . You know, we have were very, very optimistic with these major drivers in these new markets. Data is exploding. The data generation is increasing at a tremendous rate. The value of the data is increasing censor technology is becoming much more pervasive. So were very, very, very optimistic and our display business, mobile organic led displays also are early innings. Large tvs is also a major driver that will play out over many years. Ive never been more optimistic about the future for Applied Materials. And our industry opportunities when you look at potential derailing factors for the broad trends youre talking about, the ability of customers to tap capital markets, regulatory vut xroo scrutiny from administration or congress, what you would put at the top of that list of concerns Major Industries are going to be go through transformation thats we have not seen in a very long time transportation, health care, retail, many industries. That innovation is Applied Materials. So, you know, we have pretty good line of sight for the next two or three years i really think the major industry trance formations are going to happen. That people see today. I dont think i think a lot of viewers probably agree with that assessment the question is going to be whether regulators and municipalities basically the breaks of government how quickly they get in tune to that and how much they push on those brakes theres a war that happens every Holiday Season for consumer electronics, devices. That drives tremendous economic value. Thats also driving our business for both semiconductors and displays and, again, the shift in transportation, the shift in health care, the ability to have a diagnostic available for every individual and prevent serious cases creates tremendous economic value so those changes, the disruption of those Industries Im very confident. Were very well connected with many of those Large Technology companies that are driving those inflections. And i really believe that that is going to happen faster than anyone can anticipate. Stock up a couple points today. Gary, we really appreciate the time as always thank you. Thank you, carl Gary Dickerson aftof Applied Materials. Stocks off the session they have gone positive on the major averages what are you hearing, bob pisani take a look at the s p 500. 20 minutes ago we had a nice rally. Moving the s p 500 in the positive territory so that is six, seven points to the plus side. Theyre reporting that the chief of staff john kelly is going to make a decision on Steve Bannons future imminently and white house officials expect bannon to be fired this is according to axios number other independent confirmation that you can see what happened to the s p 500 we have a nice rally to the upside about six or seven points of course, guys, that traders have often perceived bannon would be a disruptive and has been a disruptive influence on the white house and on the agenda of tax cuts and when he gave that interview, of course, earlier in the week to american prospect, he talked about being essentially at a long term battle with china, talked about policies that dont seem to be in line with the current Trump Administration of course, talked about his battles with cohen and other Administration Officials and that may have been the final straw. There say little bit of a premium in the market here for the market should bannon be let go well see bob pisani, thank you very much on the floor speaking of the president and the white house. Good morning, carl. Were aware of this report we can tell you that there is speculation with this white house and nothing to report as of right now from here i can tell thought president has left the golf resort in new jersey he is on his way to camp david hes Onboard Air Force one right now. I can also tell that you steve bannon is not on air force one right now and has not been with the president this week here in new jersey hes been at the white house earlier this week. So where does that leave us . One bit of tea leaf reading is that we are not seeing a cavalcade of denials from the white house here of this axios report on the other hand,were not seeing any confirmation of the axios report either. So that leaves us in a little bit of limbo here and so we get a sense from the white house of what it is that they have decided here and where the president s going to go in terms of his personnel so nothing to report from here except for the fact that bannon is not on air force one and we do know that president by reputation tends to be adopt oftentimes the ideas of people who are closest to him and his staff very much values the idea of being the last person to talk to him before he makes any significant decisions. Bannon not being on that aircraft, he may not have the opportunity to talk to the president and give him his side of the story as of right now well wait and see carl given some of hand writtenng about gary cohen and whether he would step down, there has been this cohenbannon feud developing in the media. Maybe it makes it more likely that cohen would stay if bannon leaves just a step forward. Very hard to say. Very hard to get in the heads of any of these figures right now theyre not talking to us. Ive been emailing gary cohen hes not replied to give us a direct sense of what his plans are. We have not heard from him on the record the white house said he is staying. They put out a number of statements to that effect yesterday. And they feel like theyve said what they have to say about that and its overwith. And they dont necessarily want to dignify the conflict without further comment. Its not clear were going to hear anything else from gary cohen for the time being what he would do if steve bannon was fired . That is pretty speculative and i dont even cant even begin to say there are a lot of moving parts right now. Just reading chat frert floor of the nyse. Thank you. Continue to keep us posted please on all of this. Still to come, more than 290 million worth of classic cars on the Auction Block at pebble beach well take you there live. Im scott wapner coming up at the top of the the hour from right here at the new york stock exchange, well debate whether the pullback weve seen for stocks this week is the start of a bigger correction also, well be all over the fact that the market is coming back at this hour plus, another shoe drops at footlocker that stock getting crushed on earnings well tell you what wall street firms are saying about its next move at this hour and the one transport stock josh and sirott would buy with trade negotiations getting underway in washington all that at the top of the hour. Well see you soon. Lets send it over to Rick Santelli and the Santelli Exchange rick hi, sarah this is a perfect time to have a discussion about stocks, Central Banks, and outcomes. Why . Because theres been so few corrections for 2017 so few corrections since the 18,000 handle, right prior to the election in november and of course, when it comes to outcomes, thats what its all about. Theres an issue here. Ultimately, no matter how you feel about Central Banks, and this is a wellworn shoe down here in terms of conversations, outcomes have been pretty easy to handicap. Foreign exchange still has some volatility, and of course, if youre an importer or exporter, all of these things are going to affect you but when it comes to things like Interest Rates and stocks, it certainly seems as though the Central Banks are in charge. Nationalism and globalism, nowadays, is a huge topic. Whether youre talking about the environment, regulations, banking, immigration, borders, everything trade, especially, tax policy. Its epicenter but one area that i question some former fed officials about regarding the nationalism versus globalism, in policy, i really dont hear much. I look at the following charts okay, the first chart is a tenyear chart of the fed balance sheet. The second chart is a tenyear chart of the nasdaq. By the way, nasdaq is up still about 16 . Last chart, tenyear chart of the dax. And if you take Foreign Exchange and strength of the euro, theyre up 18 the point is, im going to show you a chart, and this chart is fascinating. I put all three together, okay so what is this . Ill tell you, whats the black . The blacks the fed balance sheet. This is a popular chart on this floor. The blue is the nasdaq the red is the dax you can see, its impossible not to see whats going on here. The reason i bring it up, this isnt necessarily shocking but what about when you have more unrest narvein markets as y to take away some of this stimulus in lieu of recession or slowing, are all Central Banks going to coordinate . Are they going to think about themselves first these are questions we need to ask, especially since the end of june where draghi caused a market commotion back to you, carl. Rick, thank you very much, Rick Santelli. 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