Transcripts For CNBC Squawk On The Street 20170511

Our road map begins with macys down double digits on the earnings miss. Shares of kohls taking a hit. Shares of snap also plunging more than 20 after its first public Earnings Report. Didnt go too well. But well dig in on the quarter. Fireworks expected on capitol hill later this morning. Acting fbi director Andrew Mccabe will take the stand in place of james comey. But first, comps are below consensus, down 4. 6 on the owned plus licensed basis. Macys says it expects the sales decline for the full year. This is nine straight quarters, jim, they have had comps in the red. Yeah. Ive got to distinguish macys from kohls here. I thought kohls was a decent number. Kohls got better and better and better and they have lean inventories. Macys what can i say . They dont have it. They are the ones when you try to figure out who exactly is in the crosshairs of the moment, i come back to macys. I just feel like that the you could floor by floor. Aisle by aisle and theyre being challenged. And it is really the weakest model out there. Target target may even have a better model than macys. So this was jarring to me. Why though, why . Why . Yeah, why their oh, because target is not in the mall. I like target. So you feel their placement in the mall makes them more susceptible . Yeah. Thats why i like kohls a little more because its in a strip mall. Macys in a prism. What happened to they had gotten religion, they were going to close aggressively stores. I mean, they had closed stores. 66. I think every one makes money, i do. Yeah, well talk about this when we get to whole foods. In the end, theyre making money. But theyre not growing. No. Theyre making money, but each store is being handicapped. I think that what they have is very much more amazonable than people realize. Remember their biggest money being made is in their perfume. In that very expensive area, that is being cooped by a lot of people. People know their size. And they dont they tend not to go. Then i have to tell you, i have a bunch of pictures and i went to a bunch of macys and they look bad. Its the red tag and the plastic hangers. It just looks like youre at a pipe rack store. If i want pipe rack, i will go to burlington or ill go to ross. It just has a bad feel. Macys, i i felt like i do more shopping in macys. I look at their stores all the time. And they just dont look good. Any conversation about macys does take us into that broader conversation about malls and mall traffic. Something we have talked about many times. I do want to add though, guys, when you talk to the larger mall operators, ones on a Simon Property group, or even general growth, they say traffic is really not down. But what they say seemingly is that people are pre are finding what they want on their phones, still going to get it at the mall. But theyre not walking around. Theyre sort of going and leaving. But that the actual traffic is not down. Very focused about whether they go. Yes. Thats true. If you can measure peoples steps that would be down a lot. They go to get cbre was on last night. They own 10 of the businesses retail. If youre experienceal, if theres something exciting to do at the mall, youll stay. Macys is one of the least exciting things i do. I force myself to go in because of this job. Okay . Literally. I mean, i have to go i have to take my wife and say we are going to macys. And she goes, well, thank heavens youre not demanding i go to sears. I was thinking i cant do that. Shes geez, i love her. I dont want to get divorced over sears. Speaking of sears, Eddie Lampert said theyre ahead of jcpenney, ahead of target. All this bankruptcy talk is blame the media. Blame the media. Yeah. He blamed the media. I think you should tweet fake news about how eddie knows i would welcome him any time for a sit down interview to discuss all of these issues. Right. Youd be cordial. I would be fair. Without a doubt. What about the small stocks since i was on that topic. When you look at a Simon Property or a general growth or a or any of the three i happened to mention, but theyre all down sharply. Theyre very well run. They tend to have as these stores go out, they have new stores that come in. And they can reconfigure the stores to be more experienceal so theyre better. If you speak to federal realty which is Shopping Centers thats don wood, their numbers are incredibly good. So its not like theyre vai cant vacant. But theyre getting new kinds of tenants. Right. Its changing. Yes. Of course if you look 30 years ago what was in the mall its different then than it is now. People used to go to shop. Thats now abhorrent. Howard schultz has talked about even teavana, theyre closing those, so the mall h has its a hardship to people and the millennials, i mean, they figure out what the best price is. And bingo. They go to that place. Or of course or go to amazon. Been a lot of traffic numbers that look at the number of stores that a mall customer goes to. And its dropped obviously. People go in, find their target and theyre gone. I wish theyd find target. Yeah. One of the things that id point out, i know that e. L. F. Didnt have the numbers and the one things that i dont have they dont have sephora. Thats truly helped penney. I wont look for a big number from penney. They have a lot of problems. Kohls does not. They have a good Balance Sheet. Kohls has good dividend, the progresship of the quarter progression of the quarter for kohls is very good. If theyre in if theyre in the right kind of mall, the same kind of mall that ross is in and that burlington and burlington is going to blow out the numbers. The only two who transcended is footlocker and childrens place. Margins were up at kohls. They did say that the traffic was different in march and april. Thats why that stock will be up today. The inventories were lean. They were helped by under armour if you want to get into the granular. I look for macys to trade around 26 lets say is where it opens. Okay. Do i think okay, you know what, theyre bottoming things. At this point, you know, down 4. 6. I have an opportunity here to buy this thing. Maybe they do some things in real estate around the edges that could be helpful. And generally speaking, maybe this is the time or is it not . Well, i think the problem is that its the time for what . Its the time to cover your short. I mean, do you want to get long i mean, nordstrom will have a good number and then will guide down for the rest of the year. Do you want why would when they report, what are you laughing about . Because you said that so definitively. I know this. This is what i do. Its true. You hit the phones. I dont pull a favor, but that was very important, well get to another topic. In the end, unless you have a whole foods that the numbers are still bad but you have a janna, you need someone to say, thats it. I want that macys store in her old square, i want that to be condos and i want now. How about making it into penn station. Turn it into the post office . Yeah. Figure something out for those poor commuters. My god. Have the city buy it for 4 billion. We do want to cover snap in the ablock. First quarterly numbers since going public. The Company Misses on revenue. Slower user growth, posts a net loss of 2. 2 billion. Evan spiegel talks about the user Growth Strategy in last nights conference call. As far as growth, well continue to focus on north america and europe where we can deliver if most value for the customers based on their devices in the network and longer term we believe that snapchat is for everyone. Its early days for us so were focused on north america and europe first. So the user growth decelerates but engagement rises to 3 billion snaps a day. Yeah. The problem is with the user growth the revenues, there were a lot of people talk about a billion. The Fourth Quarter would have to be so monster, i dont think they can do it. I think thats the reason why the main reason why the stock is down. A lot of people we went into the ipo knowing that the growth rate was declining. We knew that the company was trying to focus people on this engagement metric. I feel like they i mean, were listening to them. Oh, man, i was going into the positive spin. I dont know if its positive. No. Maybe the stock shouldnt run up to where it was. Based on what we knew going into this ipo. Someone got this 1 billion number wrong. Thats haunting them. Just like that little ghost thing they use, its haunting them. I believe when you look at the engagement 30 minutes is really great. Thats the kind of thing if youre Universal Pictures you want to advertise fast and furious and dead, number 47. Never die. But yes. Fast and furious comes back to life. Yeah. Fast and furious, social security. Yes. Wow. Fast and furious yes. Autonomous cars. Yes. I do think this is one where catalysts can happen. Theyre just getting on android, right . And android is just starting. They have europe, they just hired a manager in germany. They have a lot of users. But heres my thinking. Im against hazing. I think hazing is dangerous. Hazing in college. But evan spiegel, he needs to be hazed. He needs to be hazed like i have never seen. Youve got to put him through some sort of gauntlet because this guy is so arrogant. Hes so arrogant that i mean, honestly, evan spiegel, listen to me and listen to me good. Youre going to introduce your call the next time and then youre going to back off and let your cfo talk. Youre going to say, you know what . I did not do the job id like to, but im going to work harder. And do not relate do not relate facebook to yahoo, okay . And do not make jokes about how were infamously dont talk about new product. Because you see you killed yourself. Now, hes cool as can be. Evan Thomas Spiegel is not listening to you. He is not. Hes not even listening to you right now. No, he is. No, hes listening to me. No. What do you think wait, what is he . Is he in like th the is he i florence . My wife can talk to him there. Youre referring to the answer to which an answer was given to greenfield of whether or not he was afraid of facebook and mark zuckerberg. People are going to copy your product if you make great stuff. I think we have seen this happen a lot in technology. You know, when google came along everyone really felt like they needed a search strategy. You know, when facebook came along, everyone felt like they needed a social strategy and with snap, with our company, we believe that everyone is going to deliver a camera strategy just because yahoo has a search box doesnt mean theyre google. Interesting. Just because yahoo has a search box doesnt mean theyre going. Mike santoli said this morning that shows his youthfulness. At one time, yahoo was as powerful you should read conrad because youth is a great short story. Hes still in school. Hes got an incomplete. Incomplete. This was frightening. Okay . Because this would be like the Cleveland Browns are going to play the pats. And belichick is nothing. Belichick is nothing. He basically said that belichick is nothing. Zuckerberg didnt do that in his call . Remember the first call he had a horrible call. I do remember that one. It was horrible. Because he promised the world. He didnt have mobile, it was pathetic and sheryl talked about then they had the big call that turned it all. Yes, they did. That could still happen, but evan has to go to that carnegie, how to win friends and influence people. Im just giving some advice. I mean, its good if its taken up. It should be if you respect your elders. Humility is a fabulous thing. While were talking speaking of social platforms, twitter is announcing a new partnership with the nfl. Live programming where the league will produce a 30 minute live digital show, it will air five days a week during the regular season. Trying to nail that down. Got started there. Yeah. I think that remember they lost the true nfl. Didnt amazon pay 50 million bucks to stream five nfl games . Thats nothing. Thats a bargain. Theyre still on regular television. They could have bought the whole league. 50 million for five games just to stream them. I think thats fantastic. That was a deal. I think all of these deals only one beneficiary. Yes. The nfl. The nfl. When we come back, the president providing his own definition of trump onomics. We have the senate hearings, and the new acting fbi director will testify. The nasdaq is up five days. Longest stretch since february. But for the most part, s p and dow are slightly down for the week. E infamous traitor. E infamous traitor. And i know a thing or two about trading. So i trade with e trade, where true traders trade on a trademarked trade platform that has all the. Get off the computer traitor i wont. cannon sound mobility is very important to me. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle and it keeps my investments fully mobile. Even when im on the move. Sign up at etrade. Com and get up to six hundred dollars. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. Can we at least analyze customer can we push the offer online . Legacy technology can handcuff any company. But yes is here. Youre saying the new app will go live monday . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Bund. In about an hour from now, acting fbi director Andrew Mccabe set to testify at the Senate Intelligence hearing two days after the president fired comey. Our Kayla Tausche has more. Good morning. This an annual hearing that since 2015 at least parts of which have been public and have been open sessions for this committee. But this time theres an elephant in the room and that is the firing of former fbi director james comey earlier this week. And the timing of which occurred during Ongoing Investigations into russian interference into the u. S. Intelligence and back channels by the trump associates. Those investigations are happening at this particular Senate Committee. Its a Bipartisan Committee and there was bipartisan concern after that firing on either the rationale or the timing of that firing. Given Everything Else thats going on. In have been some developments there have been some developments on that investigation in the background this week. For instance, the committee has requested documents from treasuries Money Laundering unit and two democrats individual is a if treasury doesnt produce the documents theyre going to hold up President Trumps nominee to lead that division. And then a subpoena sent yesterday to mike flynn in the face of his refusal to cooperate with the request for documents that the committee had made. They had previously said a subpoena was a last resort and they have gone there because general flynn has been requesting immunity and they did not want to grant that. What does this mean for what congress can get done and the white house is seeing as legislative victories this summer . Well, the russian inquiries theyll take up a lot of oxygen from congress. Whatever is left over, they have to put toward some 12 Appropriations Bills that dont really have much republican consensus at present. You have a september 30th funding deadline for the government. Then you have the potential for democrats to provide big opposition. Thats what they want to do and its not going to be that difficult. We dont see any big victories for trump this summer. So far as this hearing, carl, it begins at 10 00 a. M. There will be open remarks from the democratic and the republican chair and from the witnesses the director of National Intelligence dan coats is going to speak on their behalf. So you wont hear from the acting fbi director until he gets questioned by the members of the committee. Well see which direction they choose to go in. Well come back to you for that. Our Kayla Tausche on capitol hill. Well get cramers mad dash. More squawk on the street coming up from the nyse straight ahead. What powers the digital world. Communication. Thats why a cutting Edge University counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. A lot to watch this morning. Snap earnings from last night and then the slew of retailer earnings that we have gotten this morning. Well watch Senate Intelligence later today and get the opening bell in a couple of minutes. It comes to technology, i need someone that understands my unique needs. My dell Small Business advisor has gotten to know our business so well that is feels like hes a part of our team. With one phone call, he sets me up with tailored products and services. And when my advisor is focused on my tech, i can focus on my Small Business. Predictable. The comfort in knowing where things are headed. Because as we live longer. And markets continue to rise and fall. Predictable is one thing you need in retirement to help protect what youve earned and ensure it lasts. Introducing brighthouse financial. A new company established by metlife to specialize in annuities life insurance. Talk to your advisor about a brighter financial future. The opening bell is brought to you by brighthouse financial. Established by metlife. All right. Were count down to the opening bell with about four minutes to go. Whole foods may be a feature. Late yesterday we got a series of announcements from the company, jim, in terms of an away in a way responding to shareholder unrest but not completely responding to the causes of the unrest, although they do in their words refresh the board. Well, affinity program, terrific. Cost cuts, fabulous. Big boost in the dividend, amazing. All sorts of new Board Members including ken hicks from footlocker. Ron shaich from panera. A new cfo from the exacting kohls crew. Still want extraordinary. Highest sales per square foot of any retailer. Comp stores down 2. 8, huh . I mean, honestly, thats that is just awful. So what happened is that this is going to make janna put more pressure. They didnt have good relations with janna. They slagged janna on the conference call. I know. I tried to get ahold of janna and its founder, barry rosenstein, to no avail. Unfortunately. But in is a belief, jim, that there are buyers for this company, at least amongst those large shareholders that include janna. I dont know if its true or not. I think it is. I dont know if theyre hall last nating or hallucinating but they want them to engage with the buyer. I think the sales per square foot is amazing. I think they have a layer of people that would just be they have all these kroger, i mean, amazon is that real possible, come on, no. Amazon, thats not the style, but kroger, yes. I mean, one of the things they talked about that was kind of absurd was that they said, listen, were going to raise the dividend because we want a 2 yield. They didnt get need to get a 2 yield by raising the dividend. They could have done it by having the stock go down. You see any analogs between facebook cooping snapchats niche product and whole foods cooping the niche product . Well, the affinity will matter. They generate a huge amount of cash and they have this kind of sacrosanct regional and national they have like many layers of management. And it was it was experienceal to shop there. Now its kind of okay. They fell behind. They should have brought salesforce. Com in a long time ago to figure out what the customers want. I think it could be easily in play. Not anything they said last night, although this board of directors is highly independent. I mean, ron shaich, you cant own those guys. Those guys can not be bought. So if theres a bid that comes, its going to be i think theyre going to take it. Well, you point out the most important dynamic which is this does not seem to have satisfied the activist shareholders. By the way, its not just janna, but new berger has been screaming and yelling to a certain extent. Maybe not in letters. Well, actually in letters too. Sending them its a buy because i think that its it could be a winwin. That they are going to get comp numbers up. But they wont get them up until 2020. Thats a long time to wait. But a lot of cash flow. Theres a lot of fact. Okay . Lets get to the opening bell here and the s p at the bottom of your screen. Busy morning on the macro front too. Claims come in at 236. New 28 year low. 100 plus weeks below 300. The headline, 2. 5, the estimate 2. 2. So wholesale inflation making its mark today. I think that this is is a clarion call set of numbers to buy the banks. I know that the Interest Rates arent up enough versus where they should be. But the banks are where you would go based on the two different numbers. Lets throw in oil and you can buy the banks. I think that those are good. Remember, retails case by case. Some retailers are good. Some are bad. But this oil move i think is surprising people. And its got some adherence because we have been through the two inventory numbers that matter. So banks are the place to. By the way ringing the bell is kkr, celebrating a recent ipo. A fleck, a provider of Concept Design and sketch to scale i think. Thats the reason you could have nike personalization. Personalization being a big theme running through a lot of whats still working in retail. You have your own. Okay. Personalization we hear about it a lot. Not just in retail. Remember iger talked about it on the disney call yesterday in terms of what you could see from the espn like product branded product. That stock doesnt do that poorly. I would love to know how you feel about it versus fox. Well, fox actually did not have a bad quarter. No. The reviews are generally positive. Certainly seemed to encourage a number of the analysts who follow the company. And what youre getting is more or less an inline kind of sense. You can see the stock is up. All the stocks that jim referenced had been pummelled on the overall concern about both the advertising environment, coupled with what we saw this significant increase in cord cutting that took place during the First Quarter and maybe continuing as we move into the Second Quarter as well. But in terms of fox, you know, again, not a bad quarter. Other than nat geo in terms of advertising, also they showed some decent strength. Yes. On the call itself, they didnt really get into answering many specific questions about the fox channel Fox News Channel and the changes there. But other to say theyre keeping their brand, theyre keeping the audience. Their International Orientation is really good and it makes you feel a lot better. I dont know if they just discovered the cord. When i go back over to disney call, i thought iger was candid in the strategy but the thing that dares me is the no cord. Cord nevers. Cord nevers. I mean, that has just boy, thats what the kids theyre cord nevers. Its a really good point. If you look at if you could calculate in household creation, q1 had actual creation which is usually a soft quarter. Yes. Moffetts estimate was that 6 million homes have either cut, shaved or nevered the cord. When you talk to your kids about tv, im just saying, my daughter bought a tv. I want to watch the games on it. Oh, just watch it on your handheld. Cord never. Cord never. If you are starting a house hold now, the chances are youre not going to have a video subscription. How is that possible . Because you dont need one. What its not part of your experience. Because youre so busy playing call of duty, world war ii and battle front ii . Youre going to have a netflix and an amazon subscription, you can watch the nfl games if you want. Thats it. Maybe an hbo subscription. Bernstein said yesterday, not everybody likes sports. A percentage has been paying for sports for years and never watched. Got to strip that out. Look, its a new world. Its a new world. I mean, like its brave new world. Im hopeless. I have cable and i have i have cable every house. You know, its time for that to change. Cable bill its bigger than my mortgage. Youre wasting a lot of money, you really are. But then we can talk about the different residences and waste yeah. 1500 count at least he wears them. This is a 200 count. Its like milk. Its like having brie joni suits you never wear. They make me look happy. I have to get them taken in. I used to be heavier. I wanted to get to telecom, to straight path. That incredible story that came out of nowhere. Where one day we woke up and found out about a company most people had never heard of that essentially owns all of this 39 gigahertz and the spectrum licenses they bought years ago and under the fcc rules they had to put to work. They werent making it work, they were putting up fake cell sites. Cardboard cell sites. Honestly . Yeah, its true. Anyway, the fcc said you cant do that. Were fining you. They said, fine, well just sell it. At t came along and said well pay 95 and then verizon said well pay more. And then at t said well match that 184. Thats where we ended up. 184, verizon gets it at 184 a share. Sold to you. Stock that was 34 bucks in april. In april. Well, there was a short on it. That had an aggressive short call saying it was like cardboard boxes. And that may have been the case. But they i guess they didnt quite understand the value of the licenses. For whom the bell tolls the short sellers. Yeah. Howard jonas is the big winner here. The founder of the company. Maybe a billionaire. Now a multibillionaire it would seem with this deal. Verizon comes out on top over that brief but very intense battle with at t. Thats something. We have some research to get to too. B of a is up on caterpillar. I love that call, talking about mining being good. Going to the high in the consen above the consensus. Really laying out a multiyear story. Talking about having the first being Analyst Meeting in four years. People should get that report. I think it can really resonate with those who are shorted. It makes no sense to short it, because it finally on a p e multiple, not expensive. The only one doing better is merck which had good news on chemo. A humble man, hell be on later today. Fantastic work. I think the stock should be up more because this will be a 9 billion drug in five years. Its a remarkable drug. It keeps solving all the different forms. Never want to get ahead of yourself because people have cancer, you never want to hear on tv that this is a cure all. But these are very good results. Remember, this is everything that goes up there is bad for bristolmyers. Bad. Finally, macys, got below 26 in the premarket. Hasnt been below there in the regular session in six years. Rather amazing. Almost six years. Its just rather i mean, they dont have it. Meanwhile, kohls is finally getting the respect it deserves. Its up for the day. Theres differentiation in retail. Thats what starting to happen. Its not all losers. And macys is going to take along with it nordstrom. Ralph. Coors is down today. Simon property and ggp, a couple of the mall names we mentioned a few moments ago. We have to get some time with macys to get them to change the look of the stores. It looks too you dont feel like spending a lot of money there. Bloomingdales also . They have so many skus there. So labor intensive to refold all the shirts. Its plastic hangers, it looks so shlumpy. You know, e com means youre going up against amazon. Nordstrom is going to beat but lower. Beat and go lower. Got it. Thats what theyre going to. Whats the stock going to do . It will go up on the short squeeze. And then it will end up being down got it. Its so easy. What day is that going to be . So i can sleep in. It will be tomorrow. You know, look, david, people will take up penney. Mistakenly. Then theyll hear that the comp stores are a little bit better. But nordstroms, theyre close. Thats whats going to happen. Is that okay . Nordstrom is done the phillies are going to lose. They are . Did you did you do back to the future . The phillies will lose anyway. You dont need a weather man to tell you which way the wind will blow. He does his work, everybody. Hes not just guessing. This is what i think will happen. He does enormous amounts of work. The dow is down 33. Lets get to bob pisani. A mixed market. Good morning, happy thursday, carl. Its nice to see energy back a little bit. Believe me after weeks and weeks of lagging and oil at 45 and a lot of worries that it was going to 40 really fast. Its turned around this week. Health care, sort of mixed open. Kind of disappointing the banks were down because ten year yields moved up a little bit on the headline producer, price index. Nice to be a little bit of a inflation, coming back. Speaking of inflation, oil. Commodities looking a little better. D. O. E. Oil inventory oil is coming back. What a roller coaster its been. 54, we go back to 45, then we go back to 54 and then back to 45 or 48. Were all floating around here. The question is wheres the real number, we dont know. But moving towards 50 is certainly a lot better news for the oil companies. Theyre all up this week. All up today. Marathons probably up 4 or 5 so far this week. Exxons up fractionally. I know marathon is definitely up 4 or 5 on the week. Its nice to see them turn around. The estimates are still coming down for oil companies. So if you look for the Second Quarter for exxon heres a good example. January 1st was 1. 27. Today its 1. 16. But if Oil Moves Back to 50, 52 that may change a little bit. As you can see, we just dont know what side of 50 oil is going to be on. Until the numbers keep moving around. The guys talked about the retailers this morning. I think its important for everyone to keep track of the general trend. The retail comps, macys of course worse than kohls. But still can trend down for all of these right now. The guidance, the good news is that macy affirmed the whole year guidance. Kohls didnt give an update so keeping the numbers for the full year on them. It was encouraging to hear the ceo of kohls talk about february week and overall march and april turning around. Were encouraged by the significant improvement in march and april. Thats very encouraging. After a weak february start to the First Quarter. You see the retailers down overall i think the trend here lack luster. Kohls is better. Traffic is generally weaker and march and april are generally improving. Thats the good news. Well see jc penney and nordstrom after the close today. Back to you. Thank you. Lets check in with Rick Santelli at the cme. Hey, rick. Sometimes the word melt is used for lower. We could use the word melt for the treasuries except you have to look at prices. Theyre melting down because yields are creeping higher. Look at a year to date of two year. Remember, here we are at 1. 36. We settled the year at 1. 19. The only thing between us lets look at the next chart and an eight year chart, the only thing between us and comping back eight years in terms of the last time two year note yields were here is basically 1. 5 basis points. Right now from this 1. 36 level. If you look at fives, they close here 1. 93. At 1. 94. Lower in price, higher on yield. Lets look at year to date of tens, trading around 242. 244, were getting close to unchanged. 30 year bonds year to date they settle at 3. 07. Were at 3. 05, you see where im going with this. Heres something shocking. Maybe one good reason anybody who uses percentages when they talk about yields ought to recalculate, recalculate. We settle the 21 basis points in the bund currently trading 33 basis points, more than double, okay . Were doing a slow creep, up to 100. Not to mention that it settled at 102. 20 so still down over 2 . Finally, just to point out we had a pretty crummy three year note auction on tuesday. Pretty crummy ten year note auction, today is the chance for the 30 year to see if it can break out and do better. Find some sponsorship. Well be looking at a 30 year, quite important actually. I think it shows that parts of these moves are in an exodus of longs when it looked like wed make a bee line back to 2 that didnt materialize. Back to you. Thank you very much. Still to come, is the reality of washington becoming stranger than fiction . Well talk to frank rich, one of the executive producers of veep on hbo. Were back after a break. Think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov the power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. The latest installment of our Digital Series binge. Frank rich producer of the hbo show veep is a long time political commentator and he knows politics from the real life and fiction side of things. Listen to the post election soul searching that the cast of veep went through. On Election Night as the returns were coming in, we were shooting a scene in the republic of georgia, also known as pasadena, california. You fooled me. Salinas sort of pursuing the jimmy carter role, shes sent to supervise an obviously corrupt election. An election so corrupt that two of her aides end up voting her in without intending to and then the returns are coming in. Because were shooting into the evening, as is very unsettling. Ultimately, in fact, although it was fine, we reshot some of that episode. Because of cast reactions to the returns . No, just the whole thing felt discombobulated. I think it found a weak moment for us. Maybe it would have happened anyway. You know, i think in the days that followed that, a lot of conversations, actors talking to writers. You know, producers like me talking to actors and writers, just trying to reorient ourselves and say, should we go on doing what were doing, exactly what were doing . We decided to do so, but it was something we talked about. Gee, maybe we should throw everything up in the air. But we didnt consider that very long. You mean bust up the story arc because of what had just happened. Yeah. Not just bust up the story arc, it never got that specific. But to think about it was almost more existential. Can we be funny . It was at that level. It reminded me after 9 11 that famous moment where snl decided it could be funny again. Given permission by that great laugh riot rudy giuliani. But there was a little bit of that kind of more philosophical conversation. Oh, now well rewrite episode five, it wasnt that at all. But it was trying to be good with ourselves. Feel good about what we were doing. In the end we felt sort of determined to go back to work and make a good time of it. Interestingly the show goes through pains to say its not modeled after either party. They dont allow real politics on the show but its thrown a lot of people in turmoil. Hes a great critic, a brilliant man. He went to college, he sent people reviews and people couldnt believe he was a College Student because he wrote the best one of the smartest people on earth. It will be fantastic. One of the smartest people on earth. Amazing. Hes a good one. That season im only a couple in. So he already he kind of, you know, took a Little Thunder away in me for coming episodes. Im only a couple in. Well get stop trading with jim in a couple of moments. Oil is now down 78 points. Dont go away. In july of 98. I did active duty 11 years. And two in the reserves. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. It actually helped to know that somebody else cared and wanted make sure that i was okay. That was really great. Were the rivera family, and we will be with usaa for life. Usaa. We know what it means to serve. Call today to talk about your insurance needs. I need the phone thats where i happen to be. To be the one that rings. I need not to be missed phone calls. To not be missed. I need seamless handoff. Canyon software. From reception, to landline, to mobile. I need one number. Not two. Im always moving forward. Because i cant afford to get stuck in the past. Comcast business. Built for business. Time for cramer and stop trading. Lets talk about yelp. Citi goes neutral to buy them. Theres a good article in the deal magazine that says this could attract insurgents, activists. It would be a great match for home adviser because thats a company thats a vehicle to be buying these things. I dont think stoppelman wants to sell, nor does mackie at whole foods. We dont know about that. Then yesterday, there was a big meeting, microsoft meeting. Amy hood who is really solid, the cfo said some things about margins that would not that great. Amy is very rigorous, she doesnt hype anything. If you take them at their word, thats a mistake. She is giving you enough room so microsoft will have a good quarter. Theyre dock some very good the theyre doing some good things there. I like what Satya Nadella is doing. A tough guy. Like at facebook, you dont think theyre tough guys. I mean, but the stock went up 34 this year. When you look at the accretion of value over the Mega Cap Companies it is stunning. Apple, amazon, facebook, microsoft. And then if they got the repatriation, holy cow. So microsoft is a juggernaut. I would not sell the stock on that. It would be a big mistake. Youre still counting on repatriation. I think theres the one i think thats the one thing theyll get through. I think repatriation will happen. I think thats bone that they throw. Does that mean you have written off Everything Else . Yeah. Im not kidding. Really . Yeah . Look, i just think were look, i read the failing newspaper thats the times. It just doesnt read good. I mean, theres going to be look they have a couple of republicans who want to look into it so it makes so its a long, hot summer and tax code is going to be very hard. So maybe they do repatriation. Because remember bush got that. Yeah, listen, youre not alone in that view. There are plenty of people who look at the calendar, look at the progress or lack thereof and wonder and tax reform and the complexity of it and say thats what you end up with. You end maybe a cut of some kind and a repatriation. But thats what im thinking. I have lower mid expectations. What are you doing tonight . I have zebra which put up a couple of good orders. And then amn, they dont give enough credit. And paul polman, i joined the dollar shave club. David, im a booking machine. What do you think i do, when i get the calls, do you think thats idle chatter with my wife . Who doesnt watch my show . My dogs watch my show. Its a simulation. Thats elon musk. How paul polman, i want to hear what he has to say. Did he give them the greenlight or the red light when kraft heinz came calling . They come up with dubin dollar shave club. He was once an intern at msnbc. Look at what you can do in life. Was he . I think dubin and spiegel should get together. Like a meeting of the minds there. Jim, well see you tonight. When we come back the acting fbi director set to testify before Senate Intelligence. And fallout from the president s firing of jim comey. Dows down 132. Retail is having a tough morning. Macys down almost 11 . Back in a minute. E big city . I dont miss much. Definitely not the traffic. Excuse me, doctor. The genomic data came in. Thank you. You can do that kind of analysis . Yeah, watson. I can quickly analyze millions of clinical and scientific reports to help you tailor Treatment Options for the patients genomic profile. You can do that . Even way out here . Yes. Even way out here. Good morning. The Senate Intelligence committee holding a hearing on worldwide threats set to testify among others, new acting fbi director Andrew Mccabe. Comes less than two days after the president fires jim comey. Well take you to the hearing as soon as q a begins. The president signed an executive order on voter fraud. Good morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen and david faber. The dow is down 122 largely on some weakness out of retail earnings that we got today. The Senate Intelligence Committee Hearing getting under way. Acting fbi director mccabe set to testify before congress for the first time in his role just days after the president fired james comey. Kayla tausche has more. Its an annual hearing in which the leaders appear before the Senate Intelligence committee and at least a partially public hearing where they discuss worldwide threats. Threats from outside the u. S. That could imperil the safety and security of this country. But of course the conversation could take a different turn today, especially because just yesterday the at ten attendee list swapped out james comey and put in Andrew Mccabe. Hell be questioned and a bit of a background on mccabe. Hes a veteran of the fbi, hes been there 20 years. His experience on espionage and comey when he elevated him to Deputy Director referred to him as andy colloquially. He has a good reputation in the bureau. But this is his first public appearance. In prior years, this specific hearing has covered everything from Cyber Security to Human Trafficking to state actors and well see exactly what the testimony of these Intelligence Leaders contains in it in a few minutes. Carl . Got a whole lot more interesting over the last 24, 48 hours. Thank you. Well of course take you there thrive as soon as the q a starts. And President Trump is set to sign an executive order on voter fraud. Our eamon javers has more on what we can expect there. Good morning. Yeah, good morning. We began at the white house with no Public Events on the president s schedule today. Absolutely nothing where we were going to see him and then just now the white house is saying that hes in fact going to sign an executive order. We dont know when that will be. We dont know if well see him on camera or have a chance to ask him questions about the firing of the fbi director at that event. Heres what the white house is telling us about whats in this executive order. They are saying that this is going to be more forward looking than just going back and reviewing alleged voter fraud and suppression. They say this commission theyre going to announce today is going to review policies and practices that enhance or undermine the publics confidence, in improper voting, fraudulent voting, and voting suppression. So this reflects very much the personal preferences of this president of the united states. He does not want to focus on the russia investigation. He does not think that requires investigation at all. What he thinks requires investigation in this country is voter fraud. Earlier this year when the president raised this issue and talked about doing an executive order on it, critics say that the president was calling into question the legitimacy of an election he won back in 2016 which is hardly standard political practice. Nonetheless, this white house very focused on this idea of voter fraud. How to stamp it out and how to prevent it going forward. Eamon javers, going to be a busy day both at the white house and the hill. Thank you. Lets get to snap this morning. The shares on i what getting hurt. The Parent Company of snapchat plunging after they released the first Earnings Report after first going public. Julia boorstin has more on that. Well, evan spiegel has laughed off the question about competition from facebook. Successfully copying the most popular features but analysts are not so convinced. Moffett nathanson lowered it to 11 advocating sell. And needham reiterated the underperform rating calling the results disappointing, saying there are quote several Business Model problems. But some analysts see the selloff as an opportunity. Cantor fitzgerald upgraded it to neutral. It targeted hard to reach 18 to 34yearolds. Oppenheimer upgrading to outperform. Saying snaps well positioned to take advantage of advertising shifts to mobile. And mch with the 25 price target on the stock says shares overcorrected and getting advertisers and agencies more comfortable with the platform should help deepen wallet share. Evan spiegel and cofounder murphy both lost over 1 billion from the stock drop just in the past couple of hours. Guys, back over to you. All right. That hurts. Julia, thank you. Stocks broadly are dropping in early trading here. Not as much as snap, but also got some retailers under pressure, like macys. Potential impact from the unexpected firing of comey this week. Certainly in focus amid growing concern on how it can slow the trump agenda in congress. For more were joined by David Rosenberg chief strategist and economist. Welcome back to squawk on the street and mike santoli, senior markets commentator. Does snap do anything, mike, to ruin the narrative about technology in the amazing outperformance of the nasdaq, 18 since the election . I think it disturbs the big five of the nasdaq. Really whats powering it ahead. I think coming into this week earnings did pretty much all they could do to reassure investors that basically the profit rebound is intact. So anything you got this week was more likely to detract from that view. So disney a little bit ragged and all the rest. I dont think its a big mover right there, but along with macys where the consumer side had bounced really hard, a lot of the stocks had a good few days. Now you have another reminder that things are tough there. So not saying snap is helping things today, but i dont think thats the big swing. David, were looking at all s p groups now lower today. This is a broad based selloff. Havent seen that in a while. Yesterday, we were trying to figure out if there was a market implication from the firing of james comey and the fallout from that. Whether that would delay the trump agenda and the promised tax cuts. Do you think thats a cause of the selling today . Well, it could be partially the result. I mean, theres no question this is not an earnings driven bounce in the market in the past six moms but multiple driven. But parent of but part of that is wed get deregulation and the tax cuts are also part of that. But also you had the atlanta fed take a really big slice out of its Second Quarter gdp forecast. It went from 4. 2 to 3. 6. 3. 6 is still a high number. But i think at the same time if they continue to reduce their Second Quarter estimates its going to call in question whether or not this pervasive view that the First Quarter weakness in the economy was strictly just seasonal mall adjustment and that could get some secondguessing as well. David, yeah. People are getting used to this atlanta fed starting high and working their way lower and lower. Your main take over the past few months has not been that were all betting heavily on policy, but just that were rolling over on a bunch of important metrics in a classic late cycle fashion, right . Right. We got another classic late cycle metric on friday with the 4. 4 unemployment rate. I think behind all of this message of fiscal stimulus which, you know, keeping in mind after eight years of expansion and so many late cycle measures, the elephant in the room and i have been seeing this for a while is not necessarily the fiscal policy stimulus out of washington that for the here and now has people excited. Its the feds reaction function. You are seeing increasingly with the labor market as tight as it is that the fed is getting concerned that its behind the proverbial curve. You hear people like Eric Rosengren is one of the most ardent hawks on the fomc so the risk is whether or not we see if fiscal stimulus. If we do that, the fed will do that much more. When the fed starts to raise rates and flatten the yield curve after eight years recession is not that far out of the investment horizon. Im not saying its around the corner, but what the fed is doing is far more important than what we see, you know, out of washington in terms of fiscal policy. Im just looking at the selloff, mike. Picking up steam. You have 1 moves lower for groups like consumer discretionary, real estate, almost for financials now. Yeah. You have had a lot of energy expended by the market to kind of hang around by the highs. s sort of glare its sort of glaring that the s p 500 could not just carry ahead above the highs. I think it means i think we had an incomplete pull back in march. Went down 3 for five seconds and then you rebound for the highs. We didnt come barrelling up with a lot of momentum. I think it takes multiple things to keep people interested in buying at those levels. One of them is whatever distant hope of policy progress. Thats one. As i said earnings did what they could. Credit markets are Holding Together great. No not giving you a reason to worry about the big downside. David, one thing thats getting more conversation today,ppi, to what degree the wages will come under pressure. How much are we talking about that over the summer . Well, i mean, i look at the ppi number in the context of what was a very weak print in march and frankly i dont think theres a lot of sustainability to inflation. Look, well get the odd monthly report. Thats going to be a little strong. Todays ppi number certainly was. When you look at the stability in the u. S. Dollar, you look at what the Commodity Prices have been doing which is falling. It is hard to build a big inflationary story. If theres margin pressure we will see it in the wages. But the evidence there is still pretty mixed. The one thing ill say, nobody talks about it is the fed Loan Officers survey that came out for the Second Quarter and the facts that the banks eased the lending requirements. When you look at the demand for credit indicators out of the fed in the is Second Quarter across a broad array, commercial real estate, mortgages, credit cards and auto loans, the demand for credit in the household and business sector is actually contracting. Again, when youre talking about late cycle, moving towards Balance Sheet repair, thats another classic signal but helps to explain perhaps why the retailing stocks arent doing so well right now. If households are hunkering down and going into another era of frugality by paying down debt its good news for savings but not for spending. Leff coe vits said it was good news for what it was showing in terms of consumer loans. As a leading indicator, yeah. But the thing is that its you have to look at the report wholistically. I was watching when tobias was on. Were very good friends but theres the whole report and the banks fractionally eased their lending guidelines for cni credit. Mean while, the demand i mean, you can take the horse to water, but is the horse going to drink . When you look at the demand indicators because its a full report. Not one line on cni loans and especially autos, credit cards, residential mortgages. The diffusion index was contractary. Thats not normal and again, its a classic late cycle development. We will see if your consumer thesis plays out. Well get more earnings next week. Thank you for weighing in here on the markets and the economy. David rosenberg and mike santoli. As we head to a quick break were showing you a live shot of the Senate Intelligence hearing. Of course well take you there as soon as it begins. Plus, well hear from a former Deputy Assistant attorney general and a former fbi assistant director to talk about what we can expect to hear. Squawk on the street will be right back with the dow down 17. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. I count on my dell small for tech advice. With one phone call, i get products that suit my needs and i get back to business. 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. A used car,. 95, you can trade with a clear advantage. Did you know slow internet truck, s can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. We are watching this hearing at Senate Intelligence. Lets take a quick listen. We anticipated asking director comey a series of questions about his actions in and the actions of the fbi in terms of looking into which Donald Trump Associates if any and some of their actions during the campaign as it relates to the russians. However, President Trumps actions this week cost us an opportunity to get at the truth, at least for today. You may wonder a little bit how seriously i know the white house continues to dismiss this investigation. I point out for the record the front page of the New York Times which shows a picture of clearly the administration that doesnt take this investigation too seriously. It is important to restate the critical importance of protecting the independence and integrity of federal law enforcement. This is central to maintaining the confidence of the American People in principle that all americans, no matter how powerful or accountable before the law. The president s actions have the potential to undermine that confidence and that should be deeply concerning, no matter which Political Party you belong to. This weeks remarkable developments make our committees investigation into russias influence on the 2016 u. S. President ial election even more important. And while it is clear to me now more than ever that an independent special counsel must be appointed, make no mistake. Our committee will get to the bottom of what happened during the 2016 president ial election. And again, i want to compliment the chairman on his work in this effort. We will not be deferred from getting to the truth. These actions will do nothing to undermine our resolve to follow the evidence wherever it leads. We hope to speak to mr. Comey and well speak to anyone and everyone that has something to offer in this investigate. And mr. Mccabe, i didnt necessarily expect to see you here today. We dont know how long youll be acting fbi director. But while i will adhere to what the chairman has indicated in terms of the line of questioning, i will want to make sure my first question for you, even in this public setting or will be for you to assure the committee that if you come under any political influence from the white house or others, to squash this investigation or impede it in any way that youll let the committee know. This investigation has had its ups and downs. And again, some including myself sometimes have been frustrated with the pace. We will no doubt face other exams in the future. But ups and downs and bumps sometimes is how bipartisanship works. Its a constant struggle but one worth making and im proud how members of this committee from both sides of the aisle have conducted themselves in one of the most challenging, political environments we have ever seen. The same time, chairman byrd and i have put this on a solid bipartisan footing with the shared goal of getting to the truth. In spite of the events of the last 24 hours i intend to maintain our committees focus on the investigation. Indeed, the recent actions only increase the burden of responsibility on all of us to ensure that we live up to this challenge and to uncover the truth wherever that leads. There is obviously consensus agreement among the u. S. Intelligence community that russia massively intervened in the 2016 president ial elections. Nor do i imagine that any member of this committee was surprised to see the exact same russian playbook just being run during the French Elections that just took place last weekend. And no one should forget back in mid 2015 director coates, i had some there was a hacking into the german and they should it directed at their officials with their elections in september. In short russias direct interference around the globe is a direct assault that we must work on together and its clearly one of the Top Worldwide threats. That being said, gentlemen, i want to start again by thanking you for your service to the nation. I want to particularly note that director coates who is testifying in the First Time Since his confirmation. I well take a moment here as we await q a to begin. Lets with the fbi acting director mccabe. Joining us this morning is chris shwicker and mr. Dupree. Thank you for joining us. Good morning. Good morning. Tom, you heard warner there repeating his call for a special prosecutor calling the timing of comeys dismissal especially troubling. How much do you think we think how much do we think he and burr are on the same page . Theres a good deal of bipartisanship here. I think all the senators are united in saying that we want to have an independent investigation that gets to the bottom of this. One way or the other. I suspect that if we are looking for points of disagreement it may come over the need for a special counsel. We have heard a lot of the democrats very aggressively calling for the an intd appointment of a special counsel and most of the republicans are resisting that. If theres a point of departure i suspect it will come over the question of the special counsel. Chris, how do you think that gets resolved . Well, i think the attorney general and the white house have the final say in that. Particularly the attorney general or the Deputy Attorney general in this case if theres since sessions is recused. But let me Say Something about special prosecutors. We have seen it in the past. I have lived through it. You end up using the very same investigators. You have someone different at the top, but theres an incentive to drag those investigations on and spend a lot of money and bog down and you end up in the same place and when theres a parallel congressional investigation the water gets muddied very quickly because youre stepping on criminal witnesses. Getting them to issue not duplicate statements but statements that can be often be inconsistent and that hurts you when you get into the prosecution. So it doesnt do a whole lot of good to have people multiple parties interviewing the same witnesses and looking at the same evidence. Yeah, tom, its a good reminder that yes, the fbi has this Ongoing Investigation into the trump campaigns ties to russian operatives but so do the senate and the house. And their own committees. Whats the status of those after the comey firing . Right. It does get complicated and were proceeding on multiple tracks here. I think the comey firing to some extend has invigorated the Senate Investigators and the congressional investigators because i think there are at least some people who think well, with comeys firing maybe the fbi wont be moving as quickly as we thought it might otherwise and that ups the need for congress to move quickly. So i think both of these investigations are going to go forward. They are going to be overlapping. I think its right that it can be difficult to manage these two things at the same time. But i suspect that there are a lot of folks on the hill now who say that okay, the investigatory spotlight is shifting to us. Hey, chris, a lot of wall street analysts trying to figure out how this is going to play out over the next several months. Cowen has a view you get to october, you start looking a account cr, the budget, the debt ceiling increase. Things that require 60 votes in the senate. And thats when the democrats would use leverage points to demand things like a special prosecutor or in their view perhaps trigger a government shutdown. Does that seem not unlikely or in the realm of the possible . Yeah, it throws a Monkey Wrench into that process because the director confirmation process is going to take some time, energy and investigation and the investigations of course are going to take time and attention. Theres a spotlight on them and given the circumstances, the allegations or whats in the air right now about this is an attempt to sweep things under the rug, i think the other guest is correct. I think this is just going to intensify efforts across the board. But i think its going to be very critical who steps in as acting director. Its not going to be any andy mccabe. I think theyll be in that role for a pretty good while. Lets talk about who well hear from today. Some key witnesses, big power players. Mccabe you mentioned the acting fbi director. Pompeo, cia director. Coates, National Intelligence director. Mike rogers of nsa. Tom, whos going to move this story forward . Who are you most eager to hear from at this point . I think most people are eager to hear from mccabe. Im interested to hear what he has to say. No question hes going to get a pretty aggressive line of questioning from both sides, frankly. I think that the democrats in particular are going to be asking about the state of the investigation. I think theyre going to be pushing mccabe to clarify whether comey had in fact asked for Additional Resources in the days before his termination. I think there are a lot of the democrats who are really going to try to be building the case that this is watergate all over again. I suspect were going to see lot of leading questions aimed at building and supporting that narrative. Chris, ill give you the last word on that. Do you agree with what tom just said . Yeah, i think andy mccabes testimony is going to be interesting. I expect him to be very cautious and very close to the vest when its comes to spilling out it comes to spilling out investigative details given what just happened of course and thats what got director comey in hot water. We know you cant talk much about Ongoing Investigations even in front of congress. So i dont expect to get a lot of details here. Theres going to be generalities and some generic answers unfortunately. I dont think well get a lot out of this. Were used to that. That dynamic in some of these hearings. Not every one. Plenty of political theater. Good to see you both. As we head to the quick break here, look at stocks at this hour. These losses are picking up some steam. The dow is down about 136 points right now. All of the Industry Groups in the s p are lower at this hour, led by consumer discretionary. Some of the Department Stores getting slammed. And more on the markets and of course with our eye on the Senate Intelligence hearing when we come right back. Welcome to holiday inn thank you wait, i have something for you making every stay a special stay. Holiday inn, smiles ahead. Whether for big meetings or little getaways, member always save more at holidayinn. Com we are keeping our eye on capitol hill for you. Senate intelligence hearing. Right now youre hearing are from daniel coates, the National Intelligence director giving some opening quotes. In the meantime, retailers reporting earnings macys plunging after a huge earnings miss. Another one. The stock is down more than 13 . Courtney reagan joins us with more. Its not like expectations were very high, courtney. Exactly. Department store investors had low expectations for this quarter but i guess not low enough because the stores struggled to attract customers. Macys logging another disappointing quarter with comparable sales down for nine straight quarters falling 4. 6 in the First Quarter. Thats biggest drop since this quarter last year macys actually said this was all to their expectations but shares still hitting 5 1 2 year lows. As macys earnings fall far short of estimates. However, the Department Store is reiterating the full year guidance which means they have a lot of ground to make up for the balance of the year. Now, it is ceos jeff gennettes first time running the earnings call. He told me several weeks ago hes looking at adding more Service Components and eateries to macys in the future as well as less basics and more fashion. Theres a little better news with kohls, but not much. They beat the earnings estimates by ten cents, but the comparable sales are falling short and same store sales are sliding more than expected. However, they were helped with higher customer traffic. No guidance change this time around for kohls or raider nation for that point. It improved in march over february and the under armour Product Launch exceeded aggressive expectations. He said there were strong results across the categories and it accelerated its active category overall at the retailer. Manziel says kohls will go after consumers to pick up where competitors are Closing Stores but he didnt name macys and jc penney by name specifically. Courtney. Thank you. Retail one of the culprits for the weakness today. One of the worst first half hours since march. Lets get to john harwood as we continue to monitor developments out of Senate Intelligence this morning. We spoke with schweiker and dupree a moment ago. Your thoughts as we head to q a. I think its a big moment for mccabe. You saw the remarks from richard burr and mark warner set the table. Mark warner saying in advance were going to counten you to count on you to tell us if you feel any political pressure that recalls of course the testimony that Rod Rosenstein the Deputy Attorney general gave at his confirmation hearing where he was asked would you appoint a special counsel to deal with the russia investigation and he said, yes, i would. If i believed that it is necessary under Department Guidelines to, you know, protect the investigation. We may now be at a moment where people like Andrew Mccabe who is temporarily in that acting role and Rod Rosenstein who is number two at the Justice Department need to step up if they decide theyre willing to do that. To try to protect the integrity of this investigation because its clearly under some pressure right now. Although john, yesterday, department of justice spokesman denied that comey had asked for Additional Resources. Today, again, a doj spokesperson denies that rosenstein threatened to quit. So what are we doing . Were in this period where reports are very quickly batted down. Well, theyre attempted to be batted down. The default assumption given what were seeing is that the spokespeople from the administration are not credible. That is the operating presumption. We had just in the last two days the white house completely contradict its statement and explanation for why fbi director comey was fired in the first place. On the first day they said it was at the instigation of rosenstein who on his own decided to do this report, brought it to trump, trump reacted and fired him. Yesterday, and this morning, the white house has said, well, actually, no it was trump who did it. So the administration the president personally and the administration itself has very, very weak credibility. So when you have to pit stories that surface in the media that are sourced from respected news organizations, they have a greater presumption of truthfulness than the administration does. John, i have a question for you. You said about a lot of people are looking forward to hearing from mccabe. Hes obviously going to be sitting in comeys chair. We dont know how long his tenure is going to be because clearly the administration is looking for an fbi director replacement. What can and cant he talk about . He cant talk about the russia investigation, right . We just dont know how far he is willing to take it. We have seen over and over from sally yates on monday to james comey himself in his past testimony officials demurring when asked about particular events with regard to russia. They say i cant do it in a classified setting. Mark warner indicated in his statement preceding the q a with Andrew Mccabe that if you need if you cant discuss something in public we will take your cue and not pursue it there. This committee has been pretty discreet so far. It is not unlike the House Committee which was in chaos, the Senate Committee has been pretty discreet. Pretty good bipartisan cooperation between republican richard burr of north carolina, democrat mark warner of virginia. I would expect that to continue and i think those chairs who are trying to protect the space for their own investigation will not be eager to transgress and try to pull anything out in public anything that shouldnt be pulled out. Lets bring in schweiker and dupree and john on this. Mike lee, republican from utah, tweeted today instead of a special prosecutor, chris, the president should nominate Merrick Garland to replace james comey. Amy klobuchar said, good idea. This is not trolling, hes quite serious. So do you have a basket of senators that will be the tell as to whether or not momentum for a prosecutor picks up . Well, no, i think its all over the place as you point out. I mean, there are names being batted around. I mean, obviously senator burr im a north carolinian, im a big fan of his. In terms of his playing things straight down the middle with integrity. He seems to be very intent on getting to the bottom of things. So, you know, ordinarily i dont have much faith in congressional investigations. As you hear you hear more from congressmen more than witnesses and the investigations tend to have a political tint to them. So im i have more faith honestly in the fbi investigation than anything else right now. Tom, you agree . I say this on behalf of investors who are looking for tells on a hill that, you know that theyre not as well versed on versus things like macro data and earnings . I think the first thing to focus on is who the new fbi director is because my sense is if the president nominates someone to replace comey who is universally viewed as a person of integrity and independence then i think that will cool a lot of the calls for the special prosecutor. I think right now there are a lot of folks on the hill who say that the fbi cant be trusted. Because trump is going to put in some crony or a political hack and so i think the big test for the administration now is to name someone who is unimpeachable because i think that will give a lot of comfort to middle of the road folks in congress who say, okay, that was a good, reasonable choice. Lets let the fbi do its job. Yeah. Do you have a for example before we take a break . Condoleezza rices name got tossed around today. So did james comey. I think Condoleezza Rice would be terrific. There have been a lot of names that have been floated around. I think you want someone with a solid background in law enforcement. Again whose independence wont be questioned. Chris, tom, dont go too far. Well check in with you again and john harwood after the break. The dollar remains under pressure, down 1. 24. Worst stocks of the year, macys, signet, under armour. All down today. Worst day for the nasdaq. Worst one day drop since back in march. Hello, my name is watson. I am helping 8 million taxpayers get the largest refund they deserve. One Million People can benefit from precision cancer care. 197 million passengers can fly with less turbulence. I am on my way to working with one billion people. I look forward to working with you. I am on my way to working with one billion people. Hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade good morning. Im sue herera. Heres your update this hour. A u. S. Congressional delegation led by House Minority leader nancy pelosi meeting with the indian Prime Minister modi in new delhi. Yesterday, she met with the dalai lama. Rescue work continues as aftershocks hit the Northwest Region after a quake struck the area killing at least eight and injuring 23 more. Rescuers and locals evacuated and cleared the debris. Trucks removed a controversial statue of former confederate president Jefferson Davis overnight. Its the second of four confederate era monuments to be removed from city landmarks. The workers were forced to wear the masks because of threats of violence. Summer hiring is expected to soar this year. It says 41 of employers plan to hire Seasonal Workers for the summer compared to 29 last year. 79 say theyll consider summer hires for permanent positions thats good news. Thats the news update this hour. Back downtown to you guys. Sue, thank you. We want to take you straight to capitol hill to the Senate Intelligence hearing. Where some of the witnesses are taking questions including Andrew Mccabe, acting fbi director. May have had with the president. Okay. General stewart, you heard director coates state on everyones behalf theres an expected deterioration of conditions in afghanistan. Can you give us an assessment of the situation today in afghanistan and what would change that deterioration . Thanks, mr. Chairman. I paid close attention to the operations in afghanistan. I make two trips there each year, one before the fighting season and one following. That way i get on the ground. My own personal assessment of how things are going. I was there about six weeks ago. The ndsf two years into taking control of the security environment, they had mixed results in this past year. Those mixed results can be characterized can characterize the security environment as a stalemate. And left unchecked, that stalemate will deteriorate in the favor of the belligerence. So we have to do Something Different than we did in the past. Let me back out and talk about the fact that the taliban failed to meet any of their strategic objectives that they outlined during the last fighting season. All right. Well continue to monitor this for you. The topic is the world threat. So that does include things like afghanistan, the middle east, fighting isis. Well listen for any comments on the firing this week of james comey. We have got acting fbi director there, Andrew Mccabe. First answer was he couldnt comment on the interaction between the president and between the former fbi director, james comey. Well keep an eye on it for you. Were keeping an eye on the market. The s p is down more than half a percent. Well be right back. I joined the army in july of 98. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. Were the rivera family, and we will be with usaa for life. Welcome back. Watching a bit of the selloff on wall street this morning. Dows down 114. S p is down almost 15 points along with the Senate Intelligence hearing which continues in washington, d. C. Q a going on with acting fbi director mccabe. Mike santoli is here at post 9. You dont have to look too far in the view of some. No, in fact, yesterday was the dog that didnt bite, the market didnt react. Unless its a broader perspective that says look if d. C. Kind of gets bogged down and is at a stand still with regard to policy its one fewer thing to kind of look out on the horizon and say, thats an offset to a fed that looks very resolute. To basically, you know, earnings that had been good but we had the best of the four quarters in terms of year over year growth. I think in terms of longing for that little bit of a policy boost it will detract and then branches at war with one another is never good. The unanswered question is if in a bigger way it filters into Consumer Attitudes and things like that. If were back in the old familiar 2 economy, and if fed wants to get it moving again, bank stocks are down big again, because the rates have that flatter yield curve. Thats one thing you have to absorb. One thing interesting is that the oil prices are up a percent and a half. We have decoupled from oil. It didnt hit us on the way down last week. But this week has been very strong. Its not given the market much of a boost. Not at all. I think in the range, the rest of the equity market kind of says well oil is doing its thing within that range. We wont worry too much about it. Also Energy Stocks are a relatively smaller piece of the overall index. As we know its about the big Growth Stocks carrying things for a while. I think that its interesting, energy when its been weak has not really impacted the junk bond market either. I mean, that was kind of the way it got transmitted into stocks a year and a half ago. We started to get traces of that conversation revived at 46, right . Some notes came out, is it time to get worried again. Sure. After the best day of the year for wti, it may be less so today. Vix at 11. Well talk about that in a moment. Lets get back to q a. Accurately characterize the extent of russian activities in the 2016 election and at the conclusion russian intelligence agencies were responsible for the hacking and leaking of information hacking and leaking of information, and using misinformation in order to influence our election, simple yes or no would suffice. Doir yes, i do, senator. Yes. Yes. Yes. I guess the next presumption is consequently that committee or that Community Assessment was unanimous and is not a paid piece of fake news or evidence of some other individual or nation state other than russia. I appreciate that. Mr. Mccabe i warned you i would have to get you on the record on this. Mr. Mccabe for as long as you are acting fbi director do you commit to informing this committee of any effort to interfere with the fbis wrong going investigation into links between russia and the traurch campaign . I absolutely do. In light of whats happened in the last 48 hours, its critically important that we have that assurance and i hope you relay at least to me the Extraordinary People who work at the fbi, that this Committee Supports them, supports their efforts, supports their professionalism and supports their independence. I will, sir. Thank you. In like of the fact we just saw French Elections where felt like deja vu all over again, in terms of the release of series of emails against mr. Macron days before the election and the fact that this committee continues to investigate the type of tactics that russia has used, where do we stand as a country in terms of preparation to make sure this doesnt happen again in 2018 and 2020 . Where have we moved in terms of collaboration with state voting and voter files, in terms of working more with the community, particularly the platform entities in terms of how we can better assure real news versus fake news . Is there some general sense. Director youve been on the job for a short while. How well have a strategic effort. It was russia in 2016. Other nation states could launch similar type assault. Well, we will continue to use all the assets that we have in terms of collection and analysis relative to what the influence has been and potentially could be in the future. Russians have spread this across the globe, interestingly enough i met with the Prime Minister of montenegro, latest nation to join natural jobs number 29 nation. What was the main topic . Russian interference in their political system. So it does, it sweeps across europe into other places. Its clear russians have upped their game using social media and other opportunities in ways that we havent seen before. Its a great throat our democratic process and our job here is to provide the best intelligence we can to the policymakers as they develop a strategy in terms of how to best reflect a response to this. One of the things im concerned about is, weve all expressed this concern but since this doesnt fall neatly into any particular agencys jurisdiction, who is taking the point on interacting with the platform companies, facebook, google, twitter, who is taking the point trying to ensure our systems are more secure. Well, i think obviously, our office tasks and takes the point but theres contribution from agencies across the ic. You might ask director mike pompeo to address that and other that might want to address that also. But each of us, each of the agencies to the extent that they can, and have the capacity whether its nsa, whether its nca or other sources will provide information to us that i want to use as a basis from provide to our policymakers. Relative to a grand strategy, i am not aware right now of any i think were still assessing the impact. My hope would be that we need to be proactive in this. We dont want to look at this after the 2018 election cycle. Do you have any doubt that the russians are behind the intervention in the French Elections . Let me phrase think it way. Were aware of some russian activity directed against the French Election process as i previously said before Congress Earlier this week we, in fact, reached out to our french counterparts, were aware of this activity, we want to make you aware. What your seeing. Im not in a position to look at the breadth of the french infrastructure. I can make a simple declaratory statement. Senator rubio. Mr. Mccabe without going the specific of any individual investigation i think the American People want to know, has the dismissal of mr. Comey in any way impeded, interrupted stopped or negatively impacted any of the work, any investigation or any ongoing projects at the federal bureau of investigations . As you know, senator, the work of the men and women of the fbi continues despite any changes in circumstance, any decisions, so there has been no effort to impede our investigation to date. Quite simply put, sir, you cannot stop the men and women of the fbi from doing the right thing, protecting the American People and upholding the constitution. And this is for all the members of the committee as has been widely reported, and people know this, because software is used by not hundreds of thousands, millions of americans, to each of our witnesses i would just ask would any of you be comfortable with the software on your computers . A resounding no for me. No. No, senator. No, sir. No, senator. No, sir. Director mike pompeo, Armed Civilian groups, militias in the streets of venezuela have been armed by the regime for senator mark rubio. Well continue to follow the kwrn and a portion of the Senate Intelligence Committee Hearing. Bring you headlines. Bring you live. Keep you apprised of the market activity with the dow down 113. Well be right back with sidewalk al squawk alley. Talk to your advisor about a brighter financial future. The power of the nasdaq market. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. After becoming one of the largest Broadband Companies in the country. After expanding our Fiber Network coast to coast. These are the places we call home. We are centurylink. We believe in the power of the digital world. The power to connect. And thats what drives us everyday. Good thursday morning. Welcome to squawk alley