Transcripts For CNBC Squawk On The Street 20170720

Drag hi speaking now the president marks six months in office today. Futures are steady yields below 227 as philly fed comes in light road map begin with a stock rally. Markets poised to open higher aztec stocks party like its 1999 breaking through a nearly two decade old record. Shares of american express, travellers and black stone all falling after earnings. And the Amazon Effect shares of sears are up sharply. The retailer announcing its ken more products will now be sold on amazon. First up with all three major indices posting record closing highs in the middle of a nine session winning streak thats the longest in over two years as they break through the record close surpassing the. Com record on march 27th of 2,000. That raised a lot of eyebrows. Sure did. Its pretty broad based and yesterday was surprisingly much more biotech than tech theres lefation going on. Theres companies that are just being revalued on a daily basis. Amazon being the most in terms of momentum, momentum, momentum and it is good momentum. Yes its true that regeneron lead the bio tech. Yes its true they lead the semiportion of the nasdaq but just be aware that this is very very broad based unlike the last time around when it was companies that surprised companies that were involved with the internet. This thing is involving almost every aspect of Worldwide Business and i think its quite things out of a hat. Not just proving the big three but the russell, the ndx, the mid kaps i think it was the xle for the First Time Since january. Yeah i had Summer Associates last night to watch mad money and one of the senior guys just said how is this possible given whats going on in washington . And you sit there and you say to yourself it never comes up and if it does come up, we are doing, we have worldwide growth. Always amazing and its playing into our companys hands its rather amazing. Its really amazing. This is an incredible time where companies are saying that i know that were in a country but remember we have tremendous, tremendous reach in europe and asia so dont write us off its incredible to hear how much people are distancing themselves from our country even health care. Well you have to have a global footprint in order to do that. Its happening. Because remember during the period going into the Great Recession people are already trying to diversify. Brick is back. Brick is really back and whats not back is the u. S. These companies are not saying hey, you know, u. S. Is weak although youll have some zero sums situations. Tmobile being zero sum. They are taking business with another company. Its remarkable to listen to United Health that was breaking out yesterday and have them just say dont worry about us we are not connected to it it is not hurting our business. Right but theyre not doing business around the world. No. Thats not an example of what youre talk about. Even here theyre setting up a dual situation when they say okay theyre not going to do anything for health care but we have come up with our own strategy to deal with and do nothing so we have the companies saying were not going to even look at it nothing is going to happen and the International Companies are basically saying were interactive companies. Were not captive to trump and were not captive to the democrats that Southwest Airlines that narratives are very aware of how miserable washington snchts a couple of points of concerns today the three month t bill is showing nervous about october. Extensively debt limit shows that argues that highly levered companies, student with loans are not ready for normalization in shortterm rates. That the risk of recession brablth about is more acute now. Why would he say that, come on, man. Bill has to get more focused the student loan problem, yes, its been a problem. Look i love bill but thats an ill advised state. Business has been very strong and more and more impactful. And Student Loans and data and much smaller in terms of reaching the individual. Technology is solving so many problems that now i am in a constant battle. It is not easy but when youre surrounding yourself with young people as i do at various places you hear these things and we had them on and theyre attacking that problem so im just, i dont want to create new problems. Am i worried about the debt situation yeah because its pure chaos. I wish they would stop coming on and just get something done. Roll up your sleeves, take your jackets off, remove the ties. Disrobe completely . Why not. Go have a beer or something. Whatever it takes. What happened to republicans and democrats having beers. Not allowed anymore. The level of partisanship is conceivably something that is going to hurt our country in the longterm. Already is. Im waiting for the moment. The inability to actually come together to meet the bigger problems that we have over the longterm. Which is why the outpouring of support from mccain. Lets use this moment to salute an American Hero and just get together just in the spirit of this guy who obviously spent so time and deserves everything. Great american. True. Great american. You know this morning that john ledger basically said that at t is just going all in time warner theyre just happy to lose customers. I think ledger by the way, who might not, you know, john ledger, last night had a Conference Call that basically reminded me of why that company is doing so well he gave new earnings forecasts ask why they went first in reporting and he said because were the best. I just love it where he says sprint, gives it away and still cant compete. Given the expectations people had they added more subs just generally across the board it was a good quarter for the company. Cap exis going to be at the high end of the range for them and then it comes back to m a which we talked about. I mention many times what sprint does and soft bank of course controlling sprint, trying to perhaps gain some leverage these exclusive talks coming toward the end with comcast and charter. He said i dont know its the opportunity for tmobile and sprint to get together the numbers, the cost efficiency numbers are enormous that said the antitrust potential is also enormous and so theyve done pretty well. What, theyre up to almost 70 million subs and while he continues to try to gain leverage for the talks the best leverage is performance and tmobile is performing so well. So maybe if verizon hired louis c. K. To be on the call it wouldnt impact. Wouldnt help so much. Conference call was beautiful until he bored the heck out of him. I said will you please make this call as good throughout i thought it would be an hbo special next time. Yeah. Well. Why arent other people ive asked over and over again why arent other businesses have ceos like active salespeople or whatever its usually the lawyers. He has a very shakespearean view about the lawyers. Kill all the lawyers. Yes. He had a nice video posted through the tweet going through the highlights of the quarter. Its a very unique way to communicate with investors. Its a very trumplike way. He has broken out the mode when youre talking about at t is focused on big time m a frankly every quarter, verizons massive marketing blitz looks like it might disappoint i bet it also cost him a real pretty penny. Also sprint and even sprint would agree some of their promos are not sustainable. Theyre not meant to be responded to. The talk about a dividend as well gives you a sense that they really do believe that the company is going to be something that theyre going to be doing a lot of wouldnt talk about it even a small dividend but still most of the returns still proved Share Repurchase thats another positive sign now theres no doubt, it would be fast nating to see whether we ever get to this end game of consolidation that so many people have talked about where the continuing surprise would be the ability to take every single new customer so to speak every single point of growth thats it. We should get rid of this idea on a monthly basis but this fighter that just simply wont stop i dont follow. I know hes not im just saying we need you. At t needs him . To what, fight john ledger yes yes. I need you to diagram that. I just think that ledger is, you have to have somebody at his level to stop him. Hes like the mountain in game of thrones. I was thinking belichick but ive never seen anything like him in Corporate America theres no one like him. There isnt. When we come back, one stock is getting a boost from the Amazon Effect. May not be who you think also ahead the ceo of unio pacific. Well find out what his Companies Earnings are telling him about the economy. Nasdaq is shooting for ten straight wins today. The last streak longer than that we have to go back to 2009 more squawk on the street from post 9 in a minute 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 launching ten more products on amazon. The ceo said the move will significantly expand in the u. S. Where market share has fallen over the past six years. It really is whirlpool. He finds himself up with the one company thats done the most to destroy his chain, amazon. I think he had a lot to do with it oh you mean combined with amazon yeah. I think he had a lot to do with destroying his chain im not sure that i place blame on amazon. Its just a short squeeze stock. No, theres no share. Hes still on some too. And cfo and home depot and it says sears is a fabulous share builder. One of the reasons why home depot is so great is it keeps donating shares. I have a way to do it. You get into the logistics secondary, its already too tight and they are the last delivery of things too big for ups and that is just, the winner here is logistics. Not lampert. What is he going to do go issue shares . To get back the loans he keeps giving. Maybe he can sell his shares on amazon too. Thats an interesting idea. Stock certificates. Having delivered to your house. Thats such a great idea. Yeah. Kind of like you put it right next to the catalog. Shares of sears. Are you going to go to sears this weekend and get some shirts no. What about some slacks . Im not going to kmart either. I dont ever shop there i bought an alarm clock there about ten years ago. Excuse me where are you alarm clocks do you think i look like an alarm clock person. Its been a slow and steady decline for this company for a long, long period of time. There was so much hope back when it came to real estate value he has a descent job of being able to stay afloat. He has spoken at least openly about their need to have it. They passed the time frame for all of that stuff. They say its the natural interface. Were excited that kenmore has the functionality. Consumers will love the convenience of cooling their home, starting their laundry and more using only their voice. Yeah. Because we see the difference is is rather than push the button to start the washing machine i can say washing machine start. Well, that is really, i mean when we talk about the major innovations of our time. Are you kidding me really voice activated. Is it really that hard to push a button you get me someone that will put the stuff in thats different. My wife makes me do the laundry because its a humbling experience to be in my house ive done it a couple of times im not going to say im a professional wash and fold guy but if alexa could wash and fold that would be good alexa wash and fold. Thats what you want but you think the rest of it is oversold . The idea that you can turn on the lights. Its a great press release. Its a great press release it gets the stock going, my kid versus now turned back on alexa. They turned on alexa. Privacy issue they feel like alexa knows too much about them. Its like a Spy Organization there has been a question as to exactly when sit recording or not and what amazons keeping. Or what they give to Law Enforcement if something happens in a home and alexa is on. You still do it alexa start my washing machine what is that heres how you start a washing machine. Is that really the innovation . Sometimes you have to use a dial. Is that artificial intelligence. The drier is more push. It takes longer to say alexa start my drier than to push the button that is 21st century for you. When we come back, cramers mad dash well countdown to the opening bell we still havent gotten to calls on nike and pfizer well talk qualcomm, amex and more when we return. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. It is so hard tofigure it out. And and theres really nothing you can do it was eventful. It got everybody excited the Conference Call was the other way. It was a damper. I got the sense and promise earnings and they can overdeliver in the second half i would not sell the stock. You wouldnt . I would not sell the stock. Any read through either visa or mastercard . Theyre trying to get off that train i thought they just dont want to be there. I think that they really kind of want to do the loaning look im not saying its a tired brand. Im just saying that its just not like mastercard and visa theyre going the other way. Theyre going to talk about how they are dominating the world and going from a cashless society. Theyre just doing okay. Its a blowout its doing okay. Hah sounds boring but theres no reason to buy or sell. Take a look at qualcomm a few moments from now stay with us on squawk on the street the opening bell in just over a minute. The president marks six months in office today. Align technology, nvidia act vision and win. Also going international. Its cystic fibrosis. Yesterday. That will be approved by everybody. Everybody wants that. Thats my dog enough said. Activision. Hes doing a fabulous job. Well, thats china. So this is what im talking about. It is just, people and i am stopped every day about this. Had something to do with anything going on in washington. Right and thats why you can still have a rally and the reason why the rally is still happening is people keep thinking well he has to pull these stocks back but it has nothing to do with these stocks. Its tpg celebrating their ipo at the nasdaq. Another ipo. We havent hit qualcomm too hard here jim. I felt that the key quote was they talked about apple, we had a strong relationship with am for many years we intend to continue and there was a short story spread rapidly by the bears if you take qualcomm at their word. Pretty strong and of course not getting paid by the suppliers to apple. Remember the licenses were actually there and theres other customers. Its hard for analysts to estimate where thats going to come in and overall theres a bit of disappointment with the quarter but the question for qualcomm, the center of everything is how is this going to be resolved he did say on the call he this it will be settled at some point but theres a lot of litigation as we spent a lot of time talking to you about and well in the future talk about as well a lot of litigation back and forth between qualcomm and apple suppliers. Apple of course to qualcomm, and jurisdictions around the world as well that are involved. It did have a feeling of how was the play mrs. Lincoln. It really did. Yeah. It is the apple in the room. But i will say this, the fact is is that the stock is not down that much so somebody must think something good is going to happen here. The longer it continues, the one, i mean, apple is a, has the ability to go forever, right the Richest Company in the world. Unlimited. Richer than the u. S. Government. So you need to figure out ways to pressure them to perhaps come to the table and settle maybe in the court of Public Opinion and obviously through the courts but that takes time. This is going to be resolved before Western Digital toshiba no, that one is going to be resolved sooner dont you think . Western digital had such success so far. They keep winning with the superior court judge and i think that theyll win big at the end of july. Supreme court is going to rule in favor of Western Digital and the lockup expiration of snap. Snap has to get to these people right now. I need that press release. Square listened to me. Theres 1. 2 billion free to trade. Thats a lot of stock. But 4 million shares owned by early investors. These guy versus to stop doing whatever theyre doing and get to these investors and issue a statement saying were not going to sell. Do they understand the concept or do they say were going to do what we want whats the matter . I liked it. He liked it he didnt do this. Jim we got brent above 50 for the First Time Since june 7th. Wti similar picture people wonder if the market is beginning to worry about availability of summer grade products whats going on here i think theyll lower the boom on this whole thing and say some bad things but i believe it can go to 50 in the interim. This is in the hahns of the speculators and every time it gets to 42 or 43 they push i dont and say goiths to go to the 30s and then theres a big short cover and it goes to the 50s and our companies go to the oil and futures markets to be able to pay their bills. But your call about, you said mid 40s, youre right. Thank you to my technician on this 42, 43, its too shorted and they ought to start realizing there is a pattern here since this is happening now since february every single time. Wow. You know, Morgan Stanleys market value is virtually equal to that of Goldman Sachs. Do you know why that is people are starting to pay a higher price to earnings multiple. Back to that. Did you listen to the call . Theres a moment where he talked about all the companies and how theres not a lot of competition anymore and i thought that was a great moment it talked about a tremendous consolidation and its why Morgan Stanley should be vald much higher. Im surprised by that i hadnt looked in a long time. They made such a great case. Im aware of the move up on the stock price and aware of the pact that Goldman Sachs has not been anywhere near its 4 5 2 week high although it hasnt been that bad. It goes higher. Period end of story. Just look at how theyre responding this week Morgan Stanley had strong numbers. Key by the way, the best quarter. Key bank had the best quarter of any bank and thats because the Net Interest Margin which is what they all want was at 3. 3 up from 3. 13 and the stock is down. You know, so it just shows you this group is still not light. Still not light. All right jp gorman has to get to 100. Just has to. Beth mooney is coming on. Yes what is it going to look like when its light . Janet yellen. Sthu going to feel . Multiple expansion thats what it is. People are willing to pay more or what bank of america and without rate hikes this group is adrift and janet yellen put a stake into this group when she did that thing when she was on the hill. Then she is followed up by boj today which extends their 2 inflation target draghi and im quoting very substantial degree of accommodation is needed. Inflation likely to remain at current levels for several months. Its not going up. You keep talk sog what if you did get all of those Interest Rate increases nobodys perfect. Nobodys perfect. Greatest end to a movie. Billy wilder. Yeah. A couple of calls. It was the greatest netflix once again i just have to push netflix here for one second. Netflix is not up today. Netflix is not snup. I havent checked it. Nike is up though i love that recommendation. Supply chain mark barker who is im now calling him a recluse but hes doing things with flex to deliver new products so quickly. He is back to being number 2 dh is what i wanted. Underarmor following suit not too far behind today up another almost 2 . Wow i think that look under armour bottomed theres enough sports affiliates that are in under armour that i think its fine. I am worried about home depot. People are taking this thing. Depot down almost 3 . Whirlpool down better than 4. People are just i wont mention the stock because we said were not going to talk about it. This is the real world consequences in the stock market for real companies. Right people felt they cant beat amazon. Right. People felt they couldnt beat amazon and suddenly sears is amazoning home depot so thats whats happening. The companies that cant be amazoned are going to keep diminishing. Netflix said they couldnt. Its not just appliances. Its lowes and some other names in the Building Space in general. Yeah. Sherwinwilliams although that was wow so the loss of market value and home depot is multiples of the entire value of sears. Right and home depot doesnt come out and defend themselves. Is it a threat . Now you combine on amazon. The amazon geek squad. I dont know. Home depot has been acting really doggy so maybe this is, wow, retail is just awful. Every day we get, just when we think were called out we get back into Amazon Retail is, what can i say, you dont want to be there. Unless of course you define retail as amazon in which case maybe you do. I dont know what to say. I think this is an overreaction but i also know that the market when the market hears a whisper of amazon it takes whatever it is apart and you just have to wait five days its the five day rule. Amazon trading right near an all time high. Oil companies so far immune from amazon. They are. Doing well. Dow is within about 40 points of its all time high but as jim said depot and travellers are weighing on the index. Very mixed open right now no decision on the qe until autumn. The robust recovery is what hes talk about the food stocks are doing well in europe. Unilever had good numbers in here and they raised their full year profit margin so some of the big names on the good side there why are we up so much . Were in the heart of earnings season and the numbers are holding up well right now. Almost 9 for the Second Quarter. Those numbers keep going up. Close to 10 if this continues and revenues finally come back after 5 or 6 quarters with very anemic Revenue Growth so its not just buying back stock this is why the market keeps going up Global Economy recovery sals the big help we had. This has been a broad rally. July has been a terrific month across the board we have the obvious tech leaders that we keep talking about like nvidia and broadcom and apple. But theres other groups that are out there. The Consumer Discretionary group has done well whirlpool was doing fine until the open we saw but it was also generally having a good month here. Big help to any industry material versus done well as we have seen the dollar weaken here so a nice move up in some of the new, some of the steel stocks and some of the fertilizers as well like the mosaic right now the dow down 11 points. Thank you very much for more on what draghi is saying at his News Conference this morning lets get to steve at hq. Good morning. Going into draghis press conference there was a trade on whether or not he would give us advanced notice or sense of when the European Central bank would begin reducing quantitative easing he didnt do that but sparked a lot of activity. First were going to discuss in the fall we havent even tasked the staff with figuring out the next step. Theyre qe is going to end in september. No science of a pick up. Very important for central bank with only an inflation mandate the recovery is strengthening but whenit comes to time to turn around on qe were not there yet achlt l a lot of the combination is still needed there is the u. S. Ten year it was up and then it was down now its near the lows at 224. Sail thing for the german ten year first yields were positive and then they came back and went highly negative on the day what interesting is the euro hasnt given up what looks to be a hawkish trade. It went up above 115 and its stayed there, up near 115. 5 and remained there even while bonds have gotten a more dovish signal carl as you know the currency traders are the most fun but the hardest to understand. Back to you. Indeed. A lot of cross currents on this one, steve currencies, the ten year now 225 or just below. 224 it was at 224. Whats interesting is reconsideration. I think when you go into a news event and youre waiting to hear something you hear it even though its not said i thought draghi was dovish on the outset we know he has to do something but a reporter asked is september 7th the next meeting of the ecb is that even the fall . And he wouldnt say that hes not giving an inch. He doesnt want markets to watch his words very careful. Does jackson hole play in here. He has to be there is is my understanding and theres a lot of talk and commentary that maybe jackson hole he begins to prepare markets for that turn around he cannot turn around policy but we make a mistake if we go too early. Well come back to you later on Rick Santelli at the cme good morning. Good morning, make your prediction okay this is just me but if youre waiting for the earth to shake on mari drag hhi and policy clarity ill take the other side of that back and guarantee it. At least my guarantee. Listen the markets rule, the euro rules, central bankers try to rule and they get away with it for awhile but its very counter intuitive, okay . A dovish move by mario draghi shocking and the euro is higher. We are in a world of finance where a select few are controlling the most complex mouse trap ever designed its called the Capital Markets Interest Rates, global economies, and theres no human that could do that job the markets are a bit weird but theyre consistent look at a 24 hour bunds, a lot of volatility. Look at a one week, a little bit of a drift but if you look at one week of tens we have the same drift, as a matter of fact they look alike if you change the scale from in the 50s in the bunds to the low 220s for tens heres where it diverges year today bunds they settle at 22 now heres where all the funds are at people i know that have been Trading Foreign Exchange since they were first invented in futures in the 70s send me email and texts wow this makes no sense do you know what, it doesnt make any sense because a group of people cant hold it all together the euro rules and seems like it wants to continue to rule when down came right back up. 114 handle now its at the 115. 70 mark. Probably going to get to 116 and beyond if you look at a chart starting in august thats the last time the euro was here against the green back its about ready to take off there as well. Might not make textbook economic sense but thats why economics is the dismal science. Back to you. Thank you very much Rick Santelli you might see headlines on chipotle today cell phone video obtained by our nbc affiliate shows multiple rodents falling from the ceiling of a chipotle on tuesday that fols reports of more customers falling ill this week at a location in virginia. A spokesperson says quote we learned yesterday that mice got into a restaurant and we immediately contacted professionals and small structural gap in the building as the likely access point were having it repard we reached out to the customer to make this right is an extremely isolated incident stocks not responding too much down about. 5 . All of the Restaurant Business these are unfortunate incidents but you cant have stock rally on this. People have memories, these kinds of things keep getting reported could guilty or innocent down more from here i guess so i dont know like i said, i have been a big supporter of this, im a big supporter because of the way that i thought there would be no more instances and these are indicative of something that its a rat. Its a suboptimal video hes not moving that fast for a rat. Rats in new york move a lot faster than in dallas. Its not a foot race. Its bigger, stronger, faster. Its a tough business its been outpaced. My Charitable Trust owns it. People are concerned that the same store sales and mobile order. And youll certainly hear. Executives in starbucks believe their market value will exceed that of mcdonalds because it was getting close for awhile and it has gone the other way dramatically. Hes done a remarkable job and the expectations were so high and im sure Kevin Johnson can. You saw the tweet yesterday right . A picture of ackman ordering food of a chipotle. Thats great. He has to go in every day. Its not good. Its obviously not good. Oil price doing pretty well here up above 47 lets get to jackie at the commodity desk. Oil prices are seeing about a. 5 gain today testing almost 48 barrel. Continuing the strength. I saw jim cramer in the hall way and he said its going higher. He was right the momentum is to the upside here these prices are supporting the stock market as well but to continue to achieve record gains we have to watch the Energy Earnings next week very closely. I do want to point out for the Second Quarter we did see oil prices average about 8 higher than they were a year ago so thats going to be a positive thing at the same time in june you did see that drop in brent prices from about 55 to the 45 level so that may have an impact here so a lot of the analysts im speaking to are saying 45 barrel is not a danger zone for a lot of companies if they could manage their costs through this we could potentially see, you know, in line, with estimates or we could potentially see a beat from there. Estimates have been brought down about 15 so if we do see misses its going to be a problem but right now were trading around 4337. Back to you carl. Jackie, thank you very much well get stock adg thtrinwi jim in a moment. Dow is down 13 dont go away. Excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Thats a remarkable quarter its a major turn from the way things were. A lot of people were selling a lot of stuff today and uri says go rethink your negativity about construction and the country and its doing a little better loan growth isnt going to be that good. Its a company thats ecommerce in china they listen to it. Goat a call from one of our people i didnt know the company. They were going to come on and explain what they do. Id be interested to know what they do as well. Yeah. Look these Chinese Companies are what people want so we talk about them what a weird day it was a takeover bid. You might want to look at that Union Pacific was really good. Nobody cared a lot of Companies Reporting Good Companies and they were like were just going to buy amazon, dont bother us and twitter over 20 and nobody has a single thing just keeps happening. By the way, costello coming on in the 11 00 a. M. Hour. Talk about tech and valuation. Twitter 20. 5. Wow. Not bad. They won at 28. That was the number. All i can tell you is is that this is very quitely becoming a bullish stock. Well see you tomorrow. Absolutely. And tomorrow. And tomorrow. That will be nice on a friday. Have a good one with ge down again. When we come back well talk profits on the Railroad Business and the economy with the head of Union Pacific. Later on the tech landscape with dick costolo do you is down three whuuuuuat . Rtgage offer from the bank today. You never just get one offer. Go to lendingtree. Com and shop multiple loan offers for free free . Yeah. Could save thousands. You should probably buy me dinner. No. Go to lendingtree. Com for a new home loan or refinance. Receive up to five free offers and choose the loan thats right for you. Our average customer could lower their monthly bills by over three hundred dollars. Go to lendingtree. Com right now. Welcome back to squawk on the street markets, s p and nasdaq did hit a new record high briefly. Dow down about 9 points. Oil behaving well here above 47. Thats where our road map begin with the markets but both the s p and nasdaq breaking through a nearly two decade old record. The president has tough words from the attorney general and we might hear the next few minutes as 32 million more people would be uninsured under the new Senate Obamacare repeal bill. Plus the rails are in the red. Union pacific slipping after they disappointed yesterday. The ceo will join us straight ahead. First up lets get Economic Data Rick Santelli is watching the numbers. Leading Economic Indicators for the month of june. A bit more up. 6. Thats powerful. As a matter of fact it is the best lead of the year for the series we opened up in january with. 6 but heres where i gets interesting. To find a higher number you have to go back to 2014 so it has been awhile hovering around 2 and a quarter for tens and euro strength continues and were trying to digest the words of mario draghi if only we can figure them out. Markets mix this morning with the s p and nasdaq both hitting record highs already earlier the nasdaq hoping to extend its rally to ten straight positive sessions for the First Time Since 2015 welcome to you guys. A bar raj of headlines how significant is it that we keep seeing markets move higher. Not just u. S. Markets but Global Markets too. Investors are beginning to realize theres more risk in bonds than in equities at least near term with yields extremely low in terms of pricing around the world. And improving with a Global Economic recovery and economic expansion that exists in the u. S. I find it odd that everyone is so focused on this tightening that may be coming bank of japan backing off a little bit and even if you take the u. S. Tightening at face value bond yield versus basically still sank right so what is the big concern for bond holders here . Inflation is backing away and the momentum in the data is starting to fade so we moved from a near stall in the beginning of last year as far as the economy is concerned and we accelerated through the year into beginning part of this year but it seems that we have hit sort of a cruising speed here we are in a higher gear. The economy is doing relatively well this quarter we think but its priced in bond yields are starting to fade and we moved back down to neutral and we cut from overweight to neutral so i they ultimately well see higher volatility and maybe some choppiness with lower respected returns there. I think its more appropriate to be a bit more cautious. But in fairness people have been saying more volatility show wrus there is huge risk that you cant to hold that if this right away happens. Its the reality of the normalization process and it has the potential to ebb away the prices of kbising bonds because we do have these periods of slowing since the economic recovery began as well as now we have an expansion of 2. 5 a year on the state side its at a relatively modest pace so the markets can digest it more easily and as the economy gets better state side and globally corporation which is are focused on cost containment, consolidation in industries are doing better. Im just looking here again kevin to reiterate what were looking at in these markets. For the first time in at least decades according to the journal, the s p the msci europe and asia havent had a 5 pull back i understand thats why you think the picture could change but what got us here in the first place . Lack of availability of places to go with the money. Longer term yields are low by historic standards the economy has been improving and earnings have been improving so thats all really good stuff but i think its largely discounted into price now and youre starting to see a waning of the momentum from last year so as we went from a near recession nary type scenario in the early part of last year that is good and its all been priced in but some of the momentum is starting to come out now and thats being evidenced in the data were evaluating. Im glad you mention that john if the president tweets about the stock market can he take credit for whats been happening . Because its interesting that we pressed higher even as the health plan was falling apart. How much is this a reflection of washington policy and how much is Central Banks and other factors . Its largely a reflection of Central Banks and other factors related to the economy i think it doesnt hurt that we do have a business Friendly Administration we get at least a tax cut. This could improve nicely kevin same thing for you guys . Do you expect something coming out of washington more on the fiscal side . It would be a push while the fed is relatively easy that would all be good stuff theres two possible routes we could go down. One is they dont get something done thats what is being implied by the Health Care Debate and if that gets pushed off then a lot of the expectations that were discounted into price need to come out so thats kind of the push and pull the yin and yang we dont know if thats going to happen. We can watch the dollar which is now below 95 for the dollar index. Thank you both this morning. Thank you. As we mentioned today would be ten straight wins for the nasdaq apple for its part also up ten in a row more than 30 for the year for more were joined by the global head of Technology Good to see you. Interesting the run its had in the light of recent estimate cuts market not sharing those concerns. This is a great iphone cycle and we highlighted the iphone 8 would be delayed so it does look like theres a lot of innovation going into the iphone a lot of new technologies and then a change to the touch id on the home screen so i think those issues are causing a potential delay here in the iphone 8 in my view investors are looking through this. Would you expect then guidance for the September Quarter they could decide were going to have the iphone event later than we typically do they could say im going to get the 7s or 7s plus. It will have an impact i dont think it will be meaningful enough that investors care i really dont. So at 150 now where are we on the cash. Its 17 times earnings. Sugar Water Company is at 22 the fang stocks, well, i think there is a revaluation going on at apple underneath all of this. Its not just iphone 8 theres a revaluation because i think what theyre showing is this say company that is not going by the wayside the way that a lot of Consumer Electronic Companies did blackberry, motorola, nokia. Its always been a fear whether its market share or its margins and i think in both areas they have been very very durable and i think look at the s8 from samsung its selling lower ive seen reports 20 lower than the s7 so i think when you look at apple the longterm opportunity here is the middle class is growing around the world. They dont sell here but they sell a lot over there. Apple has been a top five vendor in china. They were. Either two or three i think. So we have to dissect it. They grew over 80 in china in fiscal 15. So those come off and roll off and i think with iphone 8 theyll regain the momentum. We go to china and taiwan a lot but the comments were everyone is thinking about the iphone 8 everyone is waiting on the iphone 8 and this is coming out of taiwan in china they can regain momentum in china and as chinas middle class grows that will help apple. They dont want these 200 or 300 phones. Thats what some people can afford they want the iphone. You mention concerns about obsolescence, people thought that the apple watch was a swing and a miss and yet last night intel basically throws in the towel on Consumer Wearables it has good featured if they can even improve it to a point that you dont have it tethered to a phone that would be fantastic. It was going to move 70 Million Units or something in those levels. It was definitely disappointing but luckily were apple. We have a lot of resources iphone still drives the business so just think longterm. Did you just say we are apple. Stockholm syndrome going on here. Think of all the pieces to the puzzle that am has that others dont or cant afford whether its the car, the home, the home pod, all of these different, i think its tough for guys to compete. Would you come back to the watch . If i didnt have to have it tetherred to the phone i love the concept and the Payment Technology is amazing. But even the gps to use it on a run for example you cant get anything out of that they updated a little bit sense. I had one of the early ones. Ultimately i think lit have 4g technology and then 5g and youll be able to use it stand alone. Theres no reason they cant. Thanks. Some news on john mccain you might have heard has been diagnosed with brain cancer. Doctors at the mayo clinic found it out while removing a blood clot from above his left high yooi on friday hes reviewing further Treatment Options which may include chemo and radiation. Mccains daughter said in a statement cancer may aflikt him in many ways but it will not make him surrender nothing ever has the president tweeted melania and i send our thoughts and prayers to senator mccain, cindy and their entire family. The outpouring is truly bipartisan. Hes a fighter as she and everybody has said but its hard, its tough to hear. When we come back this morning the president s harsh words for his ag and 32 million more uninsured well talk to larry kudlow about the trump agenda on the six month mark meanwhile sears up this morning on news the company inks a deal to sell kenmore appliances on amazon theyll be compatible with alexa. Home home depot and lowes in the red on this deal well be right back. Protect business,helps from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. The power of innovative thinking. 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. Have investors been too bullish on a trump growth agenda and should there be concern about the fate of tax trade and regulatory reforms as well joining us to discuss it all and the fate of the agenda is larry kudlow good to have you. Thank you. We did have the speaker say this week in a radio interview that the tax package will be written in the fall. Do you buy that . Yeah. I basically do id like to have them start writing it in august id like to have them do the health care stuff now. Trump said yesterday youre not going home until you write a Health Care Bill i would have amended that. Youre not going home until you write a Health Care Bill and a tax cut bill. How can they write the tax bill not knowing how much theyre going to have coming out of health care. Never an important point, with respect, never. All that is is a bunch of accounting and process. But like a trillion dollars worth of changes and revenue doesnt that make a huge difference as to whether they can do overall reform or just a tax cut . If you believe that the Congressional Budget Office can estimate anything much less demand for Health Insurance over the next ten years im going to buy you dinner and im not going to take that. Im just saying i disregard all of that stuff. The models are terrible. The key point here is just do it its a policy point. Its not a numbers point you can stretch these windows to 20 years and it was a one year window and then became a two year window and now its a ten year window. Should be a 20 year window im finn with that theres no law that says you have to use cbo. Im just saying theres a lot of models out there that produce different outcomes the key is the growth. Growth, growth, growth and look i think that health care thing is something of a fiasco i really do and im going to tell you though im putting the blame directly squarely on the senate and a hand full of grand standing republicans im not going to name names unless you ask me. Wasnt that great it was spot on. I mean, these are people who were voted to come in and completely change the Obamacare Health system okay and they have failed they have not done their duty. But youre larry i dont care about deficits kudlow these days. Do you see the source on that it says people close to, not even the white house, close to the tax i use that sometimes. Well, i wish you wouldnt youre a great reporter. Thank you. That article is wrong i can just tell you, i have been down there a lot and theyre calling in the bull pen right now so weve been down there a lot. What im hear as good the same 15 or 16 . 16. On corporate. Thats what im hearing. More than some would report it. Right that was the Campaign Number with 15 . Repatriation and immediate expensing and you can throw in the doubling of the standard deductions for individuals. Sounds like you need to be at the senate and not the white house. Thats all you need. Are they on board neutral though larry. That depends. Thats the thing deficit neutral is better than revenue neutral. Youre right about that. Absolutely deficit neutral includes spending restraint deficit neutral includes things like asset sales that are not being calculated regulatory cross reduction trump hasnt gotten his big legislation. I grant you that and the health care thing was a fiasco. Much better shape on taxes. We spent the last six months talking about lobbying efforts on border adjustment you make it sound like its going to be a cake walk in three months the house has to do a budge and the senate has to get rid of the health care thing but senators have been working with various others in the white house and theyre doing their job. Theyre not that far apart see the beauty of the tax thing im not saying its going to be easy overnight i am saying it could well be done this year thats a good high probability before its up the Republican Party is badly split on health care we know that wall street journal. On business mostly and Small Business and the doubling of the standard deduction, theyre basically united on that theres accounting issues. I agree. I just want to say six months later im going to be im giving trump, first of all on a passfail basis which is probably how you all went to college. On a passfail basis. I didnt go to brown, okay. Neither did i pass sale basis i give them a pass on a letter basis im going to give him a b all right when he gets his tax cut im going to move it to an a and i want to adjust give me a second his regulatory reductions have been terrific. His particularly in energy. Were taking russia out of the Energy Business in europe because of energy exports. Because of opening up all the fracking and lng stuff he wants to do. Although i will say the oil export and natural gas was actually of the last administration. Thats correct but they did everything they could to use the epa to hold it back. Trump basically. He had not succeeded in everything he made some mistakes. I absolutely agree with that he aint perfect never s. But to me my way of thinking he ended the war against business he has ended the war against fossil fuels and he is looking out for america. Really quick you read the New York Times interview last night sessions was the first senator to endorse him the first cabinet nominee. Why would you say those things about the attorney general mr. Trump is not in a good mud about that whole story i regret Jeff Sessions is a good friend of mine he was trumps earliest guy i dont know im not happy with it i think the interview with baker was a pretty good interview. I regret that. I dont think thats great. The do you are you concerned about his view of who the fbi director really reports to no. No carl. My, i would like to see the administration when the issue and meetings come up to be more transparent. The phone books, the log books, get that stuff out as soon as you can. Its a radical transparency like the journal has been called. I would like that very much thats the theory when, you know, forecasts early and often but when you make a mistake get it out there and say okay i missed that one. Having said that, i dont still see any case of collusion with trump and russia in the campaign i just dont see it. Other people in the Administration May have a harder time, or in the campaign may have a harder time so i agree theres an achilles heel thing going on there absolutely. I hope Jeff Sessions stays with ag i think he understands what trump wants. Look im going to defend trump on the business things and growth things im going to defend him a lot im also going to defend his Foreign Policy first of all he complete changed the middle east story. Completely changed we have the alliance gone and were taking necessary military steps in syria we took mosul, thats huge regarding europe i thought the Paris Climate Accord was a bad deal for this country. These are things you do when youre in boom time and maybe the evidence is better im not saying theres no Climate Change im just saying we dont know the models yet and i think trump made a bold move and finally on trade, a lot of people worry about trade wars, as we talked, i have disagreed with the president about his trade views and im a free trade view however look what he has done. We have not pulled out of nafta were renegotiating and modernizing a 20 year plus treaty that needed it. I kind of like that. I think the stock market likes that too because all of this loose talk about blanket tariffs on german cars and steel thats not going to be helpful to the economy. Theres more work to be done there. Im going to play something optimistic he gets a pass for those of you that went to brown and im going to give him a b and if he gets his tax cuts move it to an a so far. We got to go. Thank you. Thank you for having me did you get an a i got some and i got some cs too. No way. Accounting. Yeah i barely passed by soft ball i almost failed. Ill tell you the whole story. All right when we come back in addition to that well have the ceo of Union Pacific after his Company Reported earnings. Investors focussing on the Companies Cautious forecast and o. J. Simpson is about to find out if hes going to be a freeman come october 1st well go live to the rrti fily ero. E j. Is being held. Ry i came across this house with water dripping from the ceiling. You never know when Something Like this will happen. So let the Geico Insurance agency help you with Homeowners Insurance and protect yourself from things like fire, theft, or in this case, water damage. Cannonball now if i had to guess, id say somewhere upstairs theres a broken pipe. Let the Geico Insurance agency help you with Homeowners Insurance. Call today to see how much you could save. At the lexus golden opportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. But we should be seeing more range of motion. K good, im fine. Okay, well lets see you get up from the couch. Im sorry, what . Grandpa come. At cognizant, were uniting doctors, insurers and patients on a collaborative care platform, making it easier to do whats best for everyones health, every step of the way. You may need more physical therapy. Ugh. Am i covered for that . Yep. Look. Grandpa catch grandpa duck woah ha there you go grandpa. Keep doing that. Get ready, because were helping leading Companies Lead with digital. Arizona senator john mccain recovering at his home after shocking the nation with news that he has brain cancer his doctors say he has glioblastoma that was linked to the blood clot removed above his eye. South carolina senator Lindsey Graham spoke to mccain last night. He said im going to have to stay here longer and take some treatments and ill be back and we talked about five minutes its going to be a tough week for him but he says ive been through worse. The Israeli Military says it shot and killed a 26yearold palestinian attacker that tried to stab soldiers at a westpoint checkpoint they called for mass protests on friday against israeli medal detectors placed at a contested jerusalem holy site. Transit officials are chewing on the notion of a subway snacking ban. It follows a trash fire on the tracks that crippled service on monday the food ban wouldnt be fair but the nta called them incendia incendiary. Good morning to you the department of Energy Reporting natural gas figures for the week we got an injection of 28 billion cubic feet this was actually less than expectations it is a bullish number less than what we saw last week. Less than last year at this time less than the five year average as well. Thats to be expected. This time of the year is when people crank up the ac Natural Gas Prices crept over that 3 mark again total invenn story what the traders look at. Theyre just under 3 trillion cubic feet now at the same time its about 6 higher than the five year average. Up 4 for the week but theyre down 15 year to date. Back over to you thank you lets get to washington d. C aman from news out of a press conference with the attorney general. The attorney general saying here in a press conference that he is not going to resign despite comments from the president of the United States yesterday that the president thinks that sessions was unfair to him by recusing himself in the russia matter. The president also said he thought the attorney general should not have recused himself in the situation and didnt need to do it and he would have appointed somebody else if sessions told him he was going to do that sessions was appearing in a press conference about another topic all together it was interest baugz you had some of the key players in the trump saga all standing side by side you had the Deputy Attorney general and acting director of the fbi, all side by side here on stage all have been criticized by the president of the United States sessions saying he wasnt going to resign he enjoys the job and hell do it as long as is appropriate i believe we have sound bite from what the attorney general just said. Heres what he said a moment ago. Have the honor of serving as attorney general its something that goes beyond any thought i would have ever had for myself we love this job we love this department and i plan to continue to do so as long as that is appropriate. As long as that is appropriate. You heard the attorney general say. Not clear what he means by that or what his judgment would be of when it would be appropriate to step down. A lot of speculation by the president. Also similarly asked about this and he very much wanted to focus on the topic at hand today to show that the department of justice is continuing to go out there and hunt down bad guys on the dark web in the case of this particular announcement here today. Not very keen on taking questions about what his relationship is with the president of the United States sessions also not very eager to talk about mr. Trump personally but just saying its an honor to serve as the attorney general. He intends to continue to do so carl. Its david. Bloomberg reporting right now citing one person i want to make it clear familiar with a probe that special Council Mueller is expanding the investigation to include possible ties between the Trump Campaign and russia to also examining a broad range of transactions involving trumps businesses he didnt say in anyway he would consider firing mueller. The president very much seeming in the comments to try to put a ring fence around the investigation saying this is about russia nothing more he said he thinks it would be a violation if mueller was to dive into the trump Family Finances here he did not come out explicitly and threaten to fire mueller if special council goes beyond that particular perview but that seemed to be implied in the comments and the president has the authority to fire mueller. What would happen if the president did zooir decidecide m is unchartered waters here not clear if it would be followed in the department of justice. What impact it would have on capitol hill but he did seem to be sort of toying with the idea in that interview just yesterday if mueller goes down the track well have to see how long his patience lasts for this investigation which clearly bothers him significantly. Thats for sure jane wells is with us from outside of the correction facility where o. J. Is being held with more jane. Hey, kelly. O. J. Simpson will have to convince a parole board that hes been a model inmate in the nine years since being convicted and what his financial plans are if he is released. We do know he has about 300,000 a year in pensions and thats money that is exempted from the judgment in the civil case involving the murders in the civil case but the multimillion dollar judgment plus interest taxes and other cost could top 80 million. Now simpson described himself as a friend to all on the inside. I would speak to more inmates than anybody here. Inmates tell me their stories. Some of them tell me their crimes and as far as burglary which im here for, robbery, i should say, they told me every kind of story you can hear guys robbed banks, robbed casinos, one guy robbed a gun shop which i thought took a lot of guts. Now in the last year, interest in o. J. Simpson skyrocketed after fx won an emmy for its show the people versus o. J. Simpson followed by an oscar for espns documentary for the chamber of commerce it is a boom for the hand full of hotels and restaurants. This economy depends on ag, mining, the prison and even the tesla plant but they have debated whether to cash in on the simpson saga. They put them on our love lock plaza but we have been told that we should do o. J. s picture on the back with love locks on it. Theres still time to make these because the bigger crowds could even be out here october 1st. If simpson is granted parole that would be the first day he could walk free and guys that would also be the day before the 22nd anniversary of a los angeles jr. Finding him not guilty of murder bachbl back to you. Which one is more severe robbery or burglary . Its like a crash course here for everybody as we follow this along. Yes now he got parole earlier for some of the charges. He was convicted on 12 hes still in here for the Armed Robbery charge and i dont think its the kidnapping but apparently they all talk to him and as you know everybody in prison has good friends. Jane who has covered this story since literally the beginning. Well come back to you interesting to see what happens at 1 00 p. M. Eastern time. When we return from break shares of Union Pacific moving lower as the company rorts an eaeports as beat lance fritz is with us dow did take a tumble on the bloomberg headline were down 55 now. Whoooo. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. To keep our community safe. Before you do any project big or small, pg e will come out and mark your gas and electric lines so you dont hit them when you dig. Call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. To make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. Keep yourself safe. Is. Good morning. Good morning. Thank you for having me. Weve seen encouraging data points on rail traffic on port traffic. Do your results and does your forecast ratifying this increasing bullish view . We had a very good Second Quarter. 5 volume growth is always a good thing for a railroad to leverage we also generated excellent productive 110 million and we saw that growth, it was concentrated in frak sand but other markets were relatively strong. Close tore flat in the third quarter, whats in the third quarter. Third quarter is facing a little bit more difficult comps than in the second it could be more like flattish against last years third quarter. Lance are you guys picking up any frustrated customers from csx . Kelly, were focused on making sure our Service Product for our customers is as good as it can be. The best in the marketplace and we have our hands full doing that and were doing it effectively right now. As you can see in the Second Quarter. Do you believe that their transition to decision railroading is a wise one . Is worth the risks its causing here i wont comment on some other railroads Business Plan or business approach. If you look at Union Pacific, we have been at this for quite sometime over the last 15 years or so we have generated 2,700 basis points of operating margin or operating ratio improvement and we have done that through a disciplined approach of pricing, of productive and of finding good return volume growth where we can we anticipate continuing to do that we guided that by 2019 were going to take our current 63 operating ratio to a 60 plus or minus by 2019. Yeah the longterm goal remains what 55 . Have you put a time line on that we have not other than to say well get there as quickly as we can. A quarter like the Second Quarter of this year is demonstration of what were capable of we generated 3. 4 Percentage Points in the operating ratio and really stout productive. Mr. Fritz coal shipments were up 25 year over year. Do you expect that kind of growth to continue i know the administration has been favorable to the coal industry of late but theres a natural progression toward natural gas that we have been talking about for years. One would expect thats continuing and therefore coal shipments would not be at that rate yeah, david we expect that coal is going to be about what it is right now for the foreseeable future theres more head winds versus tail winds as regards to coal not with standing what the Current Administration is doing. Clearly its helpful when they take a more sensible approach to the regulations that the epa has been applying to the coal industry and what i mean by that isnt deregulating wholesale i just mean more cost benefit analysis being more thoughtful about the overall impact on the u. S. Economy as fundamental changes are occurring to how we generate electricity but you put that all together and we believe that coal is going to be part of the Electricity Generation network for a long period of time right now its generating Something Like 30 of the nations electricity and that feels like about what its going to be as long as weather and natural gas pricing continue there remains a, this is a little step removed from your business but there remains a big debate about electric vehicles in this country. How theyll be charged and what that will eventually do to electricity demand and coal demand where do you see that dynamic going over the next few years . We have been keeping a close eye on economist vehicles for a number of different reasons. Theres changes in the truck market and that could be a dynamic we have to deal with also what might happen to the finished Vehicle Market as more vehicles become electric and autonomous theres a lot of moving parts there. It could be a good news story for us and head wind for us at some point in the future theres a lot yet to play out. Theres one thing that has us pretty excited and that is the technology that goes into Autonomous Vehicles for the road can also help us both in terms of where we use vehicles lik onramps, that could become automated guided vehicles or even some of the technology as regards to how we run our network. If you want to understand the u. S. Economy its hard to be in a conversation with you. Lance we appreciate your time. Thank you very much. Lance fritz. I appreciate it thank you. All right lets send it over to john forte for a look at whats coming up on squawk alley. Former twitter ceo also current ceo is going to join us. Techs at all time his. Gh does he trust it whats coming next thats coming up on squawk alley. Experience advanced Safety Technology at the lexus golden opportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. Are investors turning on the Central Banks. The Fund Managers that say policy is too stimulative. Find out me oronline nor squawk on the street coming up. If you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go . Expedia. 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. One item not getting much attention as perhaps it deserves, the rapid growth of fee thats banks are charging their customers. Bob pisani joins us at post 9 and hes got more on that story. And we move post 9. We put it right over here. Were standing next you to this is a really amazing story the banks are reporting the numbers here we got this boring line called Noninterest Income its a term that fees that banks charge customers for businesses and consumers. Its a business that is just growing like mad so for some of the large retail banks, its close to 40 of the income look at these numbers here some growth and that makes sense. They charge for fees for years so they come in all shapes and sizes. Youre a consumer. You know what theyre like, transaction fees, Insufficient Fund fees and credit card fees fees for the deposit slips even. Look at the typical ones a lot of complaints about Overdraft Fees, for example. The average Overdraft Fee for a Checking Account is 33. 04 in 2016 that is down from 2015 before that, it had increased for 17 straight years. Now that adds up to a lot of profits for the banks. J. P. Morgan made 1. 9 billion from overdraft charges last year wells made 1. 8 billion. This despite the nakt by law Bank Customers must choose to opt into a atm overdrafts. Then there is atm fees, another one. Fees are are high, particularly if youre taking money out of the bank that is not your own or out of your own network. So bank rate. Com found that the average withdraw fee, 2. 90. Your own bank on top of that charge an average of 1. 67 more. That is a 2 increase. You put it all together, the average fee withdrawing from a noncustomer bank is 4. 4. 57 tha a record high. Some get the fees waived you get the message s there any limit to how high they can go . There isnt. It doesnt appear to be. Despite the existence of the Consumer Finance protection bureau, there is no regulatory limit on what banks can charge for service fees on Department Accounts so guys, if i want to take out 20 from the bank and they want to charge me a 20 withdraw fee, there is no legal regulation that prevents them from doing. That. It doesnt take much to say they shouldnt ab loud to do this get people behind them. Clearly Reputational Risk and there had been attempts for lawsuits saying these are unfair practices. For credit cards, there have some restrictions on the kind of fees they can tharnlg for credit cards. But just an ordinary bank account, basically they can charge whatever fee the market bears. Like the airlines exactly just like the airlines. Exactly bob, thanks lets get over to the cme group. Rick santelli with the Santelli Exchange rick kelly, i dont know if we have anything to talk about. Lets see. Why dont we start out with the quote yesterday, still ringing in my ears we all said it nobody says it like jim grant. Radical Monetary Policy gets more radical Monetary Policy drogy . You see that box right now. Hes got a huge Balance Sheet which is the size of the feds bigger. Bigger . Yes, youre right. Dpenlding on the Currency Exchange and hes now using that to manipulate the markets so now whenever he says some word that somebody didnt think, you get a huge move out of the market he is the first, second, third and fourth most important person in the european bond market. Hes probably the second most important person in u. S. Bond market after janet yellen. That is the problem with radical monetary poll sichlt theyre infectively taking over the markets. When i talk to many men and women that trade in this room and many that used to trade in this room trading somewhere else, i always hear Something Like, well, it doesnt make sense. Our fed is kind of trying to do the right thing and snub our currency is down this is the radical policy you no he what many traders tried to short the euro because they expected mr. Dove its easy to expect mr. Dove he always shows up but look what happens. The euro goes the other way. They recycle they push the market in areas that are counter intuitive i agree with you. I think you have to keep in mind when you look at the euro strevength, you have to look at the fed, too the fed argued at least at some point that they were going to raise rates four times that should have led to some more movements in the market but now the market is saying, no, youre not going to do that the fed talked about reducing the Balance Sheet theyre going to reduce the Balance Sheet september at a minimum amount its such a pushpull. The larger issue is the whole discussion of the market starts with one central bank, the ecb, ends with another central bank, the fed. Then maybe if we have time well talk about inflation, gdp and the other traditional banks. You wrote something that i really like. You wrote that regulatory collapse is a big benefit to the market give me the short version. Three things are in the trump trade. Health care, taxes, which consumes about 95 of everybodys discussion the third thing is regulatory or a business friendly environment. By most metrics, regulatory pace is down by records right now its what ive been saying all along. Its not necessarily what he may do with his administration, its what theyre not doing adding more regs or getting rid of some. Jim, thank you carl, back to you. Hell have to be Rick Santelli when we come back, twitter ceo on twitters soaring stock, above 20 da di vuaons and more last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. What . Pony neighing] hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. Stocks mostly lower. Material stocks are the biggest laggers. Sherwin williams and newcorp which reported earnings. Shares down 1 so far after Second Quarter profits missed estimates. The steel maker said imports continue to negatively impact u. S. Steel industry participants so keep an eye on those shares that does it for this hour of squawk on the street. Lets send it downtown for squawk alley. Good morning. It is 8 00 a. M. At qualcomm headquarters in san diego. Squawk alley is live