Transcripts For CNBC Squawk On The Street 20170824

Concerns about potential Government Shutdown. Europe is green. Got a spike in shortterm rate which is were watching as well. The road map begins with president and the administration generating some more uncertainty. Well take a look at tim pact on the market ahead of major global bankers. Big game retailers on the move after earnings well look at whats hot today and amazon clearing two major hurdles. What it means for the industry in the past hour the president tweeted i requested that mitch m. And paul r. Tie the debt ceiling legislation into the va bill that just passed for easy approval they didnt do it so now we have dems holding them up as usual. Could have been so easy. Now a mess speaker ryan will be on cnbc this afternoon at 1 00 eastern the point there was to be on the air at boeing its not going to happen today. No, this is going to be to me a celebration of capitalism and boeing is our greatest fact r to and instead of celebrating business and therefore talking about tax reform, were back with the debt ceiling which i thought was by mcconnell on monday this is why tax reform doesnt happen distractions are endless were going to shutdown the government because of the wall and now have this where mcconnell is he speaking to the president . We cant get anything done and this is not fake media speaking. This is media speaking you cant even challenge them on this for fear of being considered fake media. Im real media im not even from the media. Here we are. We have a Government Shutdown were back to mickey mouse treasury yields dont care you can really screw things up thats good because the companies all learned not to worry about washington and stay out of its way like the lottery winners should. I thought he would be out there talk front and center. No, were back to this the real media is saying will you give me a break. When i was a judge on the apprentice i should have say he was going by mr. Trump then, i think we ought to focus more on picking the best. Theres a good table circulating out of lpl research. Hasnt always been bad for equities theres been 18 shutdowns since 1976 s p has risen during 8 of them. Make it clear i made that calculation once before and we had it i was taking vacation and i remember going back and forth with some people on air. To me thats absolutely right. Im just more concerned about the economic agenda and how it gets pushed out because i love the economic agenda. Real media over here loves the economic agenda and that does get forced in 2018 now its fine. Your point is just lost opportunity. What. Not that we pay a penalty of sorts. No, the stocks are going to go fup tup if the earnings are but its the opportunity the guy that was the aparprentie judge you cant miss this opportunity. You cant. We ought to get back on our game lets have some progress here because yes the market is going to go up and hes got those numbers. Maybe the market will go up either way and he says thats fine but what an opportunity lost thats what it is. We have such a great opportunity. Lets get this done. Well watch that and well talk to ryan of course at 1 00 p. M. Eastern on the retail front. It is a busy morning earnings out of tiffany, dollar tree, all of those names jumping on better than expected results. Btf, better than feared not better than expected thought it would be down two but they had good numbers. That strong dollar problem so theyre coming in and buying in american by the way president trumps headquaters and even yes, sears that is incredible because they put the line about amazon, california, select alliances now selling. Up ending, whatever he thinks hes up ending and its all good. Yeah. Fierce comps although the shares were up, comps were worse than expected. Wait a second listen, its 12 decline its excluding electronics they call them the new amazon survivors. You have to look. The top is going to be good because tiffany has fashion. I bought one of the tennis bracelets for my daughter when she graduated. But fashion is good. William sonoma fashion merged with Customer Relations management that triumphs. I love the folks they are great but they need to think bigger theres many survivors if you come in underneath the pricing burlington, tjx, dollar tree you win. If you come in way above but have great Customer Relations management, you win. There. Using the cash to do that. Just look at china and were going to look for another brand to put into the portfolio and that will happen when it makes sense to take advantage of our infrastructure. All right so some of these names that come in this morning and see stocks up 20 are they hovering at the right time look. They should have been short. We got coffee down 25 thats what youre short, turkey i do think that what he did is rather brilliant he brought calvin right in the teeth of the depression in europe betting that europe would come back. You got the double whammy, the dollar is a tail wind and the sales in all parts of the europe, europe is on fire. By the way singles day was a huge day for him because hes using alibaba which is up again today. Theres a law. But i think this is a remarkable quarter by manning. Hes ready with plenty of cash just looking for the right acquisition. 57 of the sales are still u. S i believe its private label macys kohls but hes also taking share from ralph lauren that may change but its a remarkable job to step in and buy europe just when everyone else was running through europe. With all the retail green arrows today, jim mentions food and its a tough morning for a couple of Food Companies hormel and smucker down. Both lowerring their full year guide smuckers is experiences weakness in coffee but its all about Retail Consumer commodity, both on revenue miss. Its hard to have profits down 20 and still make sales flat and thats because your margins are horrible they are doing badly muscle milk is doing bad it may be more of a fad. I think its a bit of a fad like that stuff my daughter drinks. His point was weakness in advertising is packaged Food Companies under pressure from activists or anyone else look at margins and saying where can we cut . He said we were surprised that they were surprised 45 . 45 of their money was now online where the consumer is for adverse tiegz. 35 up from 30, up from 25 and look at this, best performing consumer package good company. Hes on the wrong side of history there. I love the guy you know i love the guy. Hes a nice guy. You know how i am when i say that. Well talk about retail in a different sense when we come back amazon whole foods moves another step close tor to completion. Also a live interview with the dallas fed president dow and the s p 2 day win streak but also down 4 out of 5 on the lowest volume in a month back in a minute you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Whether its connecting one of or bringing wifi to 65,000 fans. Campuses. Businesses count on communication, and communication counts on centurylink. Livestreat the airport. E sport binge dvrd shows while painting your toes. On demand laughs during long bubble baths. Tv on every screen is awesome. The Xfinity Stream app. All your tv at home. The most on demand your entire dvr. Top networks. And live sports on the go. Included with xfinity tv. Xfinity, the future of awesome. We sat here that day in june. You have to understand theyre in favor of things lower prices they did not block this. Do you know what id love to see happen here at this point . Id love it if amazon would call one of my favorite executives. And have the customer be right and he Just Associates with people hes a great man we bring walter rob back and then you combine him with jeff besos yesterday we talked about these gangs that are coalescing. Walmart, google, target, take on what you call that top of mad money were at the tip of the iceberg with what walmart is doing why dont you call her shes like sure, there you go. And i think that you cannot go without saying im moving from amaz amazon. You have been pushing this for awhile. Now its happening. Thats because they listen to me and what im saying. Aws is the engine of whatever profits amazon hosts. Theyre amazing for that. I urge people from google to get out from under the cover and Start Talking about what theyre doing online again i think im not on his to do list in 2021 but have to tell you they have a shot here but google is in charge. Their voice does not work as well yet but when it does you will no longer be speared to amazon products. Business week has a piece out about costco half of costcos members are amazon prime members they did not embrace the web the way it should have been. They have been very apologetic about that i always like this one time. I was on page 5 and theyre late to the web and they admit theyre wait to the lab. Thats one of the reasons why they grab that premium multiple put i still like them because they make the money on the card. Now he said people wanted the two day service and now pay the membership fee tart target could be squeezed there it is the dark star but you know the empire could strike back being everybody else in retail ill wear a black tshirt i would do anything. When we come back well get cramers mad dash and countdown to the opening bell. Take a look at the premarket looks good after wgaed be inack some of mondays rally yesterday. Were back in a moment the babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. Even if its chasing squirrels, times up, insufficient were on prenatal care. Es. And administrative paperwork. Your days of drowning people are numbered. Same goes for you, budget overruns. And rising costs, wipe that smile off your face. Were coming for you, too. For those who wont rest until the world is healthier, neither will we. Optum. How well gets done. We created the ripple the doughnut in a doughnut in a doughnut. Right away, it was a success. I mean, it really took off. What people dont know is that it all started with points from my chase ink card. I bought the ingredients, utensils, even custom donut cutters. Wow all with 80,000 points. What will you create with your points . Learn more about the ink business preferred card. Hp reported a number i thought was extraordinary. I think its going to come back. They have terrific notebook numbers. Pc numbers are strong. Printing is fine and the cfo is always solid and i just think this is a great quarter for this spin off. Far better by the way than the actual parent that spun it off this is a remarkable Company Everyone wrote them off including me right here. They came on the show. I realized all of their stuff is in short supply. I have been waiting weeks for mine and thats not a plea to get mine mine just came in because i never do that stuff with companies but boy they have light models for those of us that have bad backs. Interesting and geographically strong . The whole point is now all the global economies are working here. How do you like that . I could say that, you know what, this is part of, this is gdp play and thats something that the Company Always acknowledges. The gdp play and if it werent for the fact that its going up in price this company would have had a monster good quarter not to be i followed this company at the beginning i was very negative on it. This was a good quarter. People were selling it i think are going to regret it. Well, the parent had some obstacles to work on. Yes, now they have a lot of cash the cash flow. They have returned it to shareholders regularly the company doesnt get its due thg. R than from me and i ask for noin nice call thank you. Well see if it turns around today. Well get the opening bell in a few moments. Cameras. Introducing the newly redesigned gla suv. At a price thatll make you feel like youve gotten away with something. The 2018 gla. Lease the gla250 for 359 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. 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. Dhe had a not great quarter i think theyll come back. Everything ask dependent on the fact that the u. S. Is a big swing producer and the production will not stop on a hurricane but the actual use of it, all of those places, most of these pipelines, Corpus Christie could shutdown by the way pioneer exporting a Million Barrels a month here everything is so changed now im more concerned theres going to be too much oil in the system and they cant refine it all. What a change from the old days. Interesting land fall for harvey should happen sometime tomorrow chipotle did get a two handle yesterday. Today goes to equal weight on valuation. That last incident just scared the daylights out of me its taco bells turn even even though it turns out to be a little more chemically dry you have to wait again its still fresh in peoples minds. Its fresh i ordered it this week i have no problems with it but people wont buy a stock that has that kind of wrap. Its the opening bell headquatered in new jersey celebrating its 90th anniversary. I want people to watch Constellation Brands its the growth stock of this era and theres nowhere near a tie but the growth, the Super Premium growth stocks, not unlike that by the way they have stalled. Constellation has been the leader of this group lets see what happens he has done a remarkable job and he paid a fraction of what he paid for George Clooney at tt e tequilla we need a cramer tequila. A cramer brand that you could sell. Many things are in the works. Many things are in the works but thats more lisa and shes too better making lisas none better tomato sauce. Also pbh, dollar general, if you look at the biggest losers, its conagra, right . The food business is so hard. Oil going down i feel for anyone in that business no whaert what you do youre in the super market its like being in the mall. The mall one of the things that happened last night was saying that taking share in the mall but what that may mean is hes taking share of the private label because he sells on amazon very short squeeze today thats a huge mistake. But yeah apparel good. Anyone under amazon good but the food business, and the amazon deal closing for people hanging on to that we are coming up on the season where theyre going to start selling what they make. Theyre going to have a lot of close outs. Theyre coming in with cash. When you see, i dont know if they go to kmart to get stuff but all of these Department Stores are so thrilled and they take the cash. They give them the goods well do it for a whole year and then home goods which is one of my Favorite Places it would be a great story. Its fantastic. I love that place. A couple of Research Calls in retail you mentioned lows. Yeah. And then cuts dks saying we overestimated the companies ability to withstand. You know, manny is on the board and you go across like i said to that intern that didnt wear a tie and i gave him a couple of bucks to wear a tie. You feel like youre at Dicks Sporting Goods its like four for one its like buy one get three. You walk out there with like sacks of underarmour for the good quarter they did use the word promotional. Yeah, they shouldnt have done that. I always like the chairman. They now have the advantage of having a ceo which is Something Like Tiffany Tiffany has a ceo. Some of these places were absent we have to talk about that they pull bakded back a huge am of stock this was a place that would people would say epically challenged thats further in. It would be amazing i think that it comes back here. Its just all good tiffany was fabulous that stock is going 1000 every one is getting better. They never destroyed it. They tried mightily to destroy it and they couldnt they did everything they could to destroy tiffany other than to start selling it and it could not be destroyed thats a good brand. Other fall outs from the dollar in gold up 2 out of 3. Up 2 for the month as we said earlier out performed stocks for the first time. There you buy the stock of gold because he is in places challenged politically but he will go anywhere and does not fear it. Down a touch today but what a run. Its been a run a lot of that is the weak dollar. I recommended that the person that won the lottery put 10 of their assets in gold keep it all in this country because fdr confiscated all the gold in 1933 so there. Thats right. Are you expecting any headlines either tonight or tomorrow draghi has to start saying that europe is stronger. You mentioned that synchronized growth he has to at least acknowledge that theyre crushing it when you see the numbers in europe, in spain, in italy, those sweaters are expensive and sometimes there is a line. Or theres often just traffic in the store like madison avenue and i think the madison avenues of germany you cant get into the Stores People have to start recognizing that theyre doing so much better than us our president , here real media speaking our president should also talk about how europe is using its weak currency to hurt us i know hes fixed on china i thought when bannon went to breit pa breitbart the president would expand beyond china but hes so busy attacking the news. Or mcconnell or ryan. He must have really liked the cloud. He did have that statement saying we continue to work with the white house advancing our agenda. Id assume not be part of the conversation im busy watching ultimatea trap ahead you do a trade right now you go long alphabet and maybe buy puts William Sonoma not going up after that terrific call wow. Amazon is wow, 953. Down more than 100. The high was 1083. You know, the dollar trade is a little nippy i always joke you can eat off the floor of the dollar tree and then questions why you would want to eat off the dollar tree. It has the best candy aisle in the world. I fool everybody with these. Place them strategically. Yeah. They are every bit as good as the glasses i used to see the sun. The solar eclipse. Dont look at the solar eclipse. No, my dogs can be blinded. Nvidia was almost blinded by the solar eclipse. Dow is up 35. Were going to go to Rick Santelli this morning. You look at tens and they are but if you look at one week its been a slow drift and its been highly traded. If we look at a july start date you can see the oil market has been consolidating lower in a very orderly fashion but when you add a couple of months on to it what we see is coming down into the zone that held the low close of the year and its still a lot of support down there. If we start to do much about the 227 to 229 look for some reversal action. Now when we think about jackson hole, i think of one thing, you know, jim says we should get mario dragi to say how good things are ill show you a picture of how good things are. Heres a shot, the two year, just since april of this year, look at the drift in this. Minus 73 i just dont see how anything could be good when youre giving it all away on the short end now if we look at the currency, obviously a different story. Maybe not such a good thing. It seems to like this consolidation in the euro to make up some ground but if you look at the euro versus the dollar theres been a lot of these sideways but it certainly hits all the turns and also euro versus yen a lot of power in the euro even though its going sideways this may end up differently than the sideways down road action may end up differently but most of the guys on this floor follow the big trends because its been working for awhile back to you. Thank you very much lets get on the floor as well hey, bob. Good morning, happy thursday, everybody. Modest upside here, the Leadership Group here, retails make another effort. They tried it several times this year but theyre making an effort Retail Stocks are up today thats a Leadership Group. Semiconductors also trying to reassert itself as well as bio tech and banks these raul groups that did not do well but have been trying the next couple of days. Remember we have that hurricane, that issue coming in texas, oil is down but gasoline is up now so i want to point out whats going on because the refiners are all to the upside because gasoline is on the upside. Even though most of the complex is to the down side. We have noted this for a long time now the whole issue of the russell 2,000 being a sort of test for tax reform russell declined dramatically once the helthd care bill failed and started moving up and has been down this week and russell is up 1. 3 and today is outperforming. If you want to use it as the test for tax reform prospects are improving for tax reform upset about the retail beats they had a smaller loss. Raised guidance. A lot of people are trying to argue that were reaching some kind of bottom we heard this story before it is true that there is things that are showing some improvement. A glimmer of improvement we have seen sequential improvement in the First Quarter generally. July the commentary has been strong overall yes theres modest improvement i like to look at it without walmart because it drags stuff around so much these are 112 companies. Q1 was down q4 was only up 0. 1 so yeah theres a improvement without walmart but the earnings are still kind of lousy so dont get too excited about this q2 earnings are going to be up 0. 2 they were down 3. 9 and in q4 they were also down 1. 6 so the trend is is definitely improving a little bit but still not that great overall. Were making an attempt to buy Retail Stocks again. The reason i like it is theres about 100 stocks in this and theyre not quite equal weighted but almost equal weighted. Its not like walmart moves the whole index because its there they dont have as much influence and you can see they have been trying to buy it and if they try it again in july it completely failed because all the earnings were disappointing in the first part and now theyre better and theyre trying to buy it again good luck. This is the same with energy you have a lot of nerve to buy at the bottom here we dont see any real signs of growth now bottoming wont be enough to get a big rally in most of these we bounced off a one month low on monday. Were getting smacked around by trump headlines and thats true. One thing everybody has to be careful of is the headlines here the follow is continuing to drop so the average volume has been 7. 1 billion shares thats the total volume of all of the exchanges on the average day of 7. 1 billion shares. Thats normal than you would normally get in august it creates a lack of liquidity that makes it easy to smack the markets around and certainly mr. Trump has influences on the market but it can be a little outside. Right now the dow up 20 points back to you. Thank you as youre talk about the president has tweeted yet again in this case about Mitch Mcconnell. He writes the only problem i have with Mitch Mcconnell is that after hearing repeal and replace for 7 years he failed. That should never have happened as the relationship between the president and leader mcconnell is just something people are trying to figure out. If we were to hack twitter and shut it down for a couple of days, we he would probably get tax reform. I dont think hathats goingt happen. Could you just shutdown for a couple of days until we get tax reform hes a Good American he went to westpoint. The echo chamber that results from twitter takes up a lot of our time. It does i think mcconnell should take t instagram right now. Do you think he knows instarting rotation dpri instagram . I bet he does youll want to hear why hes excited about Artificial Intelligence dow is up 21 points. Were back after a break thats where all the oil is being produced and this is where a lot of oil is refined and exported so youre going to have a big back up at Corpus Christie so if anything were going to try to find a place to put the oil. Were a huge exporter of oil now. Right there. Yeah. Not the way we dealt with supply disruption in the past. No. Where we were not there. Its huge between us and the regular ones that sit around the world. We had an analyst on day before yesterday that suggested there might be a theres a floor to crude until amarco goes public. I dont disagree with that. The problem is that if we start, do you know our budget, thank you rusty for this theres 43 Oil Companies that were sur vad and the budget is only down 1 year over year. Theyre not stopping so that whole price reduction, it meant absolutely nothing to us its 50, 42. So you need to see it. Its a little outvoted but youd like to see it come down. It will come down like 2. There was a time i used to call the rig count in the 80s. That meant you drill one hole so keep in mind that the place where we export and the place where we used to make them those are under attack by this storm its kind of like existent. Jimmy stewart. Yes. Fl ulof surprises dow has gone into the red. So has the s p were down 16 points well get stock trading with jim in a minute. Duncan just protected his family with a 500,000 Life Insurance policy. How much do you think it cost him . 100 a month . 75 . 50 . Actually, duncan got his 500,000 for under 28 a month. Less than 1 a day his secret . Selectquote. In just minutes a selectquote agent will comparison shop nearly a dozen highly rated Life Insurance companies, and give you a choice of your five best rates. Duncans wife cassie got a 750,000 policy for under 21 per month. Give your family the security it needs, at a price you can afford. Since 1985, selectquote has saved over a million families millions of dollars on Life Insurance. Those are the three things that people think you can defeat amazon with. Okay omni channel and value perception the value is probably on amazon but the perception might be a better value. How you get the stock up. Unbelievable. Disappointed in this market i thought that retail could be a leader but i guess not. Definitely lost our early gains. Yeah we really did. Its depressing. Although ge and ibm are among the big dow gains. In the event of nuclear war you buy those two stocks. What are you going to tackle on mad. We have intuit. Synaptics. On how it can go up and epr when you go to a theater and add drinks, you have tequila, you watch the movie and theres crying babies, he is the trust behind those and also golfing. Hes a genius so i shut up and let him talk. Viewers have ideas for your tequila brand. Denro loco. He does say everything is overvald but hes going to hurt the stock. Well see you tonight mad money 6 00 p. M. Eastern time when we come back dallas fed president live fm rojackson hole as the dow and the s p have gone into the red were down 16. Theres nothing more important than your health. So if youre on medicare or will be soon, you may want more than parts a and b heres why. Medicare only covers about 80 of your part b medical expenses. The rest is up to you. You might want to consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like any Medicare Supplement insurance plan, these help pick up some of what medicare doesnt pay. And, these plans let you choose any doctor or hospital that accepts medicare patients. You could stay with the doctor or specialist you trust. Or go with someone new. Youre not stuck in a network. Because there arent any. So dont wait. Call now to request your free decision guide and find the aarp Medicare Supplement plan that works for you. Theres a range to choose from, depending on your needs and your budget. Rates are competitive. And theyre the only plans of their kind endorsed by aarp. Like any of these types of plans, they let you apply whenever you want. Theres no enrollment window. No waiting to apply. So call now. Remember, Medicare Supplement plans help cover some of what medicare doesnt pay. Youll be able to choose any doctor or hospital that accepts medicare patients. Whether youre on medicare now or turning 65 soon, its a good time to get your ducks in a row. Duck quack call to request your free decision guide now. Because the time to think about tomorrow is today. Home sales down to 5. 44 Million Units thats a big miss. The street was looking for 5. 55 and thats the lowest since august of last year. Sales just slightly higher 2 from july of last year. Whats the problem clearly its prices. The median existing home price, 258,000 and thats up year over year and thats the highest july median price on record why are prices so high inventory down 9 year over year just 1. 92 million homes for sale that is three years of falling inventory and compare that to newly built homes that are at a 5. 8 month supply but we did see that very disappointing number yesterday on sales of newly build homes in july. So weakness in the Housing Market right now still a lot of cash. 19 but still disappointing for housing in july. Missing on the streets prediction down 1. 3 from june back to you guys good thursday morning welcome back to squawk on the street david is off today markets look good in the premarket but were down right now. Were watching obviously the beginning of jackson hole. A bit of a relief rally in retail and some tweets from the president. Our road map does begin with that meeting of the minds. Top central bankers and economists gathering in jackson hole wyoming discussing Monetary Policy and the economy well take you there live and hear from the dallas fed president. Well talk retail all soaring on earnings. Well dig through the numbers. Plus a Tropical Storm heading straight for texas threatening one third of u. S. Refining capacity we have those details as well. More than ten retailers releasing results since after the bell yesterday a lot of earnings movers to get to in retail just this morning, dollar tree, and ambercrombie and fitch all good morning to you. Good morning. So the question with some of these better earnings did expectations just fall too low or are we actually seeing a turn in the business . Well in my opinion all the retailers knew q2 would be better than q2 and the market forget it was because some of the earnings numbers were ugly and yet still better than expected so the shorts got squeezed and they went up. So think this means were going to have a q3 and q4 but consumers in good shape were going to have a good consumer but its not going to be a brick and mortar q3 and q4 like it looked in q2. Were still seeing all of that transition and all the costs to go online. I dont think this means much more for the end of the year than what we already knew. So the characteristics of those that will outperform are well see people outperform. Theyre doing the right things well see them beef up their game a little bit and they are making changes that will probably work and i think that will happen but i dont think that changes the trajectory of everything going online. Well also see strength out of walmart in the back half because i think the things theyre doing are work but that opportunity mean that theyre going to have higher return on investment in the back half because they have the same problem everybody has is that a luxury story or something tiffany specific well, that is our call in terms of luxury goods being better as a whole. Were recommending lvma as well as tiffany and what we have seen is very good product execution leading to better numbers however theres still an opportunity for comps to turn positive in terms of the disruption things have normalized what are looking for what is amazonable and deep value stocks tj max, ross, walmart offering discounts or luxury goods because in the jewelry industry you want to touch and feel and dont count stores out 77 of the people we surveyed still like stores so the future in my view is mixing digital and physical we are kaushlcautiously optimistic. Cant they get their share for six months at a time in other words it doesnt happen like clock work dollar for dollar every quarter yeah it pretty much does. It will be interesting to watch what happens i dont think that were going to see much change when you see growth with these brick and mortar retailers the growth is really coming online and all the numbers show that and they see less and less coming out of the store and the store deleverages. That will continue to happen even if they look good through the back end of the year and amazon iss market share component just continues to grow i mean, they grow a lot faster than retail. Were all looking for places where amazon cant get you and theres few of those but theres places where they can get you less fast and off price is one of them and do it yourself home goods is ood but that doesnt mean theyre not amazonable. It just means theyre slower than other places. Is it a realization that others can effectively in group. I think people are concerned about walmarts impact amazon doesnt make money. Its hard to understand why their stock is as strong as it is so im never surprised when it drops back but people have looked at it and said walmart can be competitive with these guys. 5. 2 growth theyre both growing faster. How do investors know theyre keying into this me trick for growth figure out whether its better or worse than it should be. Yeah, i mean, i think when we look at the industry as a whole its double digit growth at least 20 or more 30 to 60 growth those are the benchmarks online. Growing double digit at least and were having a tough time in physical retail. So traffic and getting people to walk into stores is difficult. Thats a nice positive thats kind of the magnitude of what were seeing. I think calling out caution regarding amazon, the Shopping Mall is a caution place because the mall traffic there is down anywhere from 5 to 10 as well as clothing and apparel. You can get really cheep clothing thats great for 5 liter literally that would be a key risk factor as we think about amazon getting so much share in the Apparel Market or is the market based on the evaluation of the mall based stores extrapolating that traffic declines for a long time to come . Half of online traffic is mobile theres a profound shift in the way people shop. Having a phone in your pocket is basically having a store in your pocket so a real transformation with social media. The stock in terms of owning the stock youre looking at better than feared scenarios. On not great numbers but valuations have really come in so thats a key dynamic. Longer term models again luxury off price is what we like but we answered the question with yes there should be expectations for continuation of negative physical traffic as well as we head into the fall is back to school a catalyst for retail sales its not an event anymore not much happens and then we start worrying about the Fourth Quarter and i agree, i think the Fourth Quarter will see the largest drop in traffic in the history of retailing which was only last years largest drop in history in traffic in retail. Whats the drop i think it will be high Single Digits and i think last year was about 9 and this year its going to be that or more but it will be in that range and its probably going to be last year. But you still say you can invest in some of these stocks they have market value at the moment. Good discussion guys. Thank you for coming to post 9 always nice to see you. Plenty to watch in politics today. Got new tweets this morning from the president raising heightened concerns aman is in washington watching that and what a possible shutdown would look like thats right as they continue the august repairs here at the white house the president is continuing a bit of a tweet storm this morning here at the white house as well. They put out statements trying to repair the relationship of the profanity laced Conference Call between the two men in Mitch Mcconnells private thought that it might not be possible for the president to undo the damage he has done to his presidency and salvage his presidency so yesterday the white house saying they were united on their shared agenda. That came at 5 45 p. M. At 9 45 a. M. The president was tweeting about Mitch Mcconnell heres what he said so far this morning. He said i requested that Mitch Mcconnell and paul ryan tie the debt ceiling legislation into the popular va bill that just passed for easy approval they didnt do it so now we have a big deal with dems holding them up as usual on debt ceiling approval could have been so easy. Now a mess so the president passing the blame for a debt ceiling problem on to republicans. He also tweeted the only problem i are is that after hearing repeal and replace for 7 years he failed. That should never have happened. Those two tweets dont read like the president decided and also raising the failure in debt ceiling negotiations an official said they dont want to see any problem with the debt ceiling. They want to raise it. The treasury secretary wants a clean debt ceiling bill from capital hill the president this morning indicating there could be problems with those negotiations i asked the white house for comment on that and they didnt have any back to you. Well come back to you on this and more. A quick programming note on all of this, the House Speaker paul ryan will sit down exclusively to talk taxes, trade shutdown and more at 1 00 eastern time. When we come back well get you caught up on the latest market move. The nasdaq is moving down a third of a percent otherwise fractional decline plus well take you live to jackson hole, wyoming. Steve sitting down with Robert Kaplan his thoutsgh on raising rates this year. The president s economic agenda and much more. Squawk on the street will be right back oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. That just means youre not being paid for the risk and as a risk aware investor i want to get paid for them. Its often not a free lunch if Cash Rich Companies are not trading at a preed ymium my business is going to go to the Cash Rich Companies. You can have cash and getting in the market yes i think that Companies Like microsoft and brookshire are in safe places and worried about Companies Taking risk at the cash balances. Thats not case almost all in growth mode. What do you think this means the market is saying it cant last keeping rates cool so there for marks are anesthesiaized what do you think . We talk about this Growth Profile that you mentioned so this Growth Profile is only in comparison to the weakness we have been seeing over the last several years so were still talking about moderate conditions at this point specifically in the u. S. Were still talking about a sub 2 economy so a very heightened level of concern as theyre meeting to talk about raising rates and potentially slowing the pace of this moderate accelerati acceleration this has come up every time for the last couple of years is that something that youre watching. It is but i do agree with the previous assessment that it is a lot of rhetoric in the marketplace right now but it causes uncertainty and any time we have uncertainty, surrounding the debt ceiling coupled with the uncertainty that were seeing in the Global Environment this can spook the market so certainly the on going rhetoric, the threats of default the threats of Government Shutdown, this is never a positive direction or positive communication to the marketplace and so at this point we would like cooler heads to prevail among politicians. Some sort of negotiation and clear transparency of exactly how theyre going to deal with raising the debt ceiling which we know eventually they will do. Our viewer wants to know how you think at these levels and whether you see its changing. We invest all around the world and the misnomer that low Interest Rates equate to a high multiple, it doesnt low Interest Rates can portend lower growth rate. Thats bad for equities. Equities care about growth more than Interest Rates to we think this should go up. Equity investors are the risk. When people come with money they have to raise money we inquirities. Thats what is hurting the market its not what the market interprets it at. Thats a good take. Really interesting thanks guys. Well see what we get out of jackson hole the next couple of days when we come back, Tropical Storm harvey headestigd raht for texas threatening u. S. Refinaer industry in a big way. Squawk on the street will be right back 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. The second largest jackpot in powerball history has a winner well now, mike its just reset to a 40 million who wants that and though the excitement has dissipated the drama continues it was not watertown massachusetts as originally reported. It just illustrates the importance of checking your tickets because there were six 2 million tickets, won or boug bought more than 30 1 murder in the Second Degree 1 million tickets. Heres the winning numbers did your check your tickets . Im sure jim cramer would like me to mention his big advice in case theyre watching. Why wouldnt they be watching cnbc number one, take it as a lump sum pay out. Number two dont get reckless and number three pay your taxes which is pretty good advice even if you didnt win a big jackpot. Well come back here later today. Watching the powerball numbers the Energy Industry is closely watching this developing storm that could become the first hurricane to make land fall in texas in nine years. Jackie joins us we details on how it might impact production and refining. Good morning to you, carl waiting to see if this does and that means that prices could see a spike. Theyre lower now. On the refinery sides it represents less than half of overall capacity so its significant. Houston, texas city, baytown, new orleans, baton rouge, they represent the highest in capacity category 2, 12 weeks and category 3, 23 weeks to get back to normal so while it could cause a strike it may not be as dramatic in the current environment. All depends on the damage. Were about to finish out the summer driving season that didnt turn through the amount of gasoline inventory expected if it just passes through and doesnt have a huge impact we need to brace for lower prices after labor day but if the storm is severe it could be a temporary game changer what we know the National Weather Service Forecast 75 Miles Per Hour winds and 15 inches of rain harvey is about 400 miles south of Port Mansfield texas but could make land fall tomorrow. Companies are being urged to put emergency plans in place and start evacuating depending on the severity of the storm. Prices are down but they are trading higher back to you. Jackie, well watch that. Thank you very much. When we come back well take you to jackson hole. Steve sits down with dallas fed president Robert Kaplan. President Robert Kaplan. Almost one hour into the trading im here at the Td Ameritrade trader offices. President Robert Kaplan. Almost one hour into the trading steve, other than making me move stuff, session. Squawk on the street continues in just a moment let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. White house and Donald Trumps soninlaw Jared Kushner met with Benjamin Netanyahu today. Hes part of a team looking to restart peace talks in the middle east. 8 people are still missing following a mud slide in the swiss alps the force of the rocks of the mud slamming into the small town was the equivalent of a 3. 0 earthquake youre up to date. Thats the news update at this hour back to jackie this time for the eia inventory report. Were watching Energy Prices closely and the eia out with gas numbers. That was exactly in line with the expectations the five year average is about 54 you can see they were trading about 297. They are trading in the same place after the report because it was in line people will be watching the weather very closely and of course the impact of Tropical Storm harvey as well when it comes to gas prices. Back to you, carl. All right ill take it jackie, thank you with that well send it out to the kansas city feds annual economic symposium in jackson hole steve is there among the moose and central bankers sitting down with a very special guest. Good morning. Now we are still waiting for the monetary boost to appear proceedings begin this evening with the opening dinner. Thanks for joining us. Good to be here steve. I have to start off with this news now that the hurricane bearing down on your state the state of texas. So we play a key role from a financial point of view and before a storm like this banks and others going to want more cash so were geared up to serve those needs. The other thing we do is particularly in our Houston Office and along the coast we work closely with all the First Responders our concern here is not the initial storm as much as the understooding that is likely to occur. So were prepared that theyre going to be theres going to be a real risk of flooding for several days it could disrupt refinery infrastructure and other infrastructure so our job is to work with other Government Entities to make sure that we help with the response. Are you doing that now . Going out to the banks right now . We want to be responsive to their needs but normally what will happen and is happening in a situation like this, thank bs want to build up cash because they dont know what the Transportation Logistics will be and were working hard to serve those needs and to respond. How about the potential Economic Impact especially in the Refining Capacity . So much of which happens in the southeast coast. Im confident that we have the ability to recover and well be prepared to experience some disruption over the next days and im confident that well work through it and work with our partners to help respond to this. From one storm to another thats looming in washington, the possibility of a Government Shutdown next month . How does that effect or alter your plans for what the fed should do with Interest Rates and the Balance Sheet . So the most pressing issue is i have been vocal saying i think we should begin the process of letting the Balance Sheet run off soon as soon as the september meeting announce that. Id still be optimistic its going to happen. This is certainly something well be monitoring very closely. There is a timing issue. Could that keep you from reducing the Balance Sheet. I dont want to prejudge how the timing is going to unfold. I think the key is we have to monitor it closely and it will be a factor we should begin it as soon as possible. You had conviction when it comes to the Balance Sheet what about conviction about another Interest Rate hike this year i said publicly as you know that i want to be patient. I have been a strong advocate. We now sit at the 100 and 125. Im confident were going to grow thisser year and take more slack out of the labor market. The issue is about inflation and were trying to weigh the content between the factors which could be creating more inflation and some of these muting Pricing Power of businesses and im not saying that we wont act by the end of the year but i want to be we have the ability to bepatient here and see how the forces unfold before we make a judgment how deep is the crisis within the fed when it comes to the ability of the issue to create inflation. It was something that central bankers always thought they could do its a conflict between the cyclical forces and Structural Forces that are powerful and new. Its historically low. Its a new phenomenon i spend a lot of time talking to Business People and out and understanding what businesses are seeing and i think when theres a conflict it pays to be patient. You talk about people around the table. Economists and Business People how do you feel about the possibility that the next fed chair could be not an economist but a business person. Im not going to comment on any specific individuals or changes other than to say the great thing i learned about the fed, ive been around now two years at the fed its a very Resilient Organization well work effectively and adapt to it and were a very Resilient Organization so im confident about our ability to be effective. Do you think janet yellen should be reappointed as fed chair . Im not going to comment on that other than to say i have been impressed with janet yellen and she has been an excellent leader i find her very good to work with great listener great at mobilizing the group to make a decision. I have been very impressed with janet yellen and you didnt do it im not factoring in any of these proposed policies. I may but heres why im not you and i talked about this before some of the policies will be positive for gdp. Regulatory review is positive. Infrastructure spending. Tax reform the best approach is to wait for them to develop and be inactive and ill factor them into my thinking and my forecast this year doesnt make any assumptions about new policies being enacted. Theres the bill the president has endorsed which would cut immigration in half. What kind of gdp effect did that have well, one of the big challenges we face is our population is aging and our work force growth is slowing and Participation Rate was 66 its 63 today also theres a big skills gap we need to grow the work force if were going to grow gdp so i wont get into what type of scoring makes sense for immigration. But i want to emphasize that immigrants and their children made up over half the work force growth in this country they are likely to need to make it up over the next 20 and one of the key confidences is our ability to take in people, including my grandparents, asimulate them and make them productive members of society and thats been one of the keys to the country and i would be low to see us lose that distinctive confidence. Its another longterm type question. You heard me say, we have to see how. If you ask me today id say closer to 2 than to 3. Thats a change. If you ask me what the neutral was five years ago or ten years ago, ten years ago i probably would have said closer to 4 or 5 today i think its in the 2s. What does that mean . Were probably not as accommodated as people think all of that wraps into a big question which the fed discussed at its last meeting which was current market levels. The stock market levels. The rate policies. Are you among those who share concern and worried about it as the fed perhaps with draws stimulus my take on it maybe a little bit different. Rates are lower. Pes in the market are higher thats certainly the case and the thing im concerned about is not so much market value ill concerned about build up on excess debt and people owning significant assets thats the same as leverage. So far i dont see them to a point thats concerning. One of the reasons i dont see them is we had very tough regulations for the big banks. One of the things ill be watching for those excesses. I think its important that we keep strong stress testing and id be a strong advocate for that. My colleague back in new york has a question for you. All right. Hi, nice to see you the president three risks this week either through his rally or twitter account. With drawing from nasa which he threatened to do he called the debt ceiling discussion and raising it a mess and also threatened a Government Shutdown if he doesnt get the funding for his border wall. Of the three which one scares you the most in terms of a near Term Economic and market risk . Well certainly two and three the risk there is buy niinary. I have to monitor that but one i am concerned about and i speak out a lot and in particular our trade relationship with mexico our imports from mexico are primarily, about 70 based on our work, intermediate goods that means theyre not final goods, theyre goods going back and forth across the board as part of integrated supply chain and logistics with u. S. Companies. If we undermine those relationships and logistics and supply chains well make them less competitive jobs have to be globally competitive and i think our trade relationship with mexico allows us to do that nafta should be rereviewed and negotiated and theyre ready to do that but it has to be done in a appropriate way because theyre essential. I believe the u. S. Competitivene competitiveness. Global growth and one of the great developments has been were sort of fierg on all cylinders at a global standpoint how has that changed your forecast does it make you more optimistic are you adding points to gdp when you look out ahead . Theres no question that better growth outside of the United States creates tail winds for the United States but also highlights that theres an opportunity for the United States so globalization has been blamed for a lot of the issues in this country and its been blamed for things maybe its not responsible for it its an opportunity for the u. S. To be more integrated with the rest of the world and create jobs here and create more growth so i think and im glad Global Growth is better i see it as an opportunity for us in the years to come to create better growth in the United States. Back to you guys here from jackson hole. Great interviews. Great live shots thank you for that steve in jackson hole. Well take a quick break here and take a look at stocks at this hour up 23 after dipping briefly into the red coming up an interview you do not want to miss today at 1 00 eastern time we sit down exclusively with House Speaker paul ryan to talk about a lot of things we just discussed. Squawk on the street continues in a moment. The channels you love. Your favorite shows and movies. Making your iphone into more of a. Oh my tv is ringing. Hey. Im in the middle of a. A second iphone from at t . Okay right now when you buy a new iphone 7 from at t youll get a second iphone 7 on us. And power both with unlimited data and live tv. A demographic shift with a big effect on the economy. Find out what it is and why it matters. More squawk on the street coming up i sat down with reed hoffman, venture capitalist at microsoft. We talked valuations, diversity. The next big thing that people arent actually talking about. Thats coming up top of the hour squawk alley. Dont miss it. I know when i hand them the keys to their first car its gonna be scary. But i also know that were gonna have usaa insurance for both my boys. Its something that theyre not even gonna have to think of. Its just gonna be in the family. Were the tenneys and were usaa members for life. Today, paul ryan, a cnbc exclusive. The loomin stocks have turned positive again. Lets go out to the cme group in chicago. Rick santelli with the Santelli Exchange morning, rick. Good morning, sarah and good morning beaterman, beaterman, beaterman, charles thanks for taking the time aloha, ricky. Listen, from a company perspective, lets get inside the big s p 500 companies. From their perspective, from the inside looking out, whats going on with cash, cash buybacks, Capital Spending what insiders are you seeing any patterns, charles . Were seeing a significant slowdown in newly announced corporate buying new buybacks are down. New cash takeovers are down. And recently just with Second Quarter numbers coming out, Capital Expenditures for the first half of this year are at the lowest level since 2011. So companies have thats important. Thats why i watch the durable goods numbers to see exactly the proxy for Capital Spending dig into that. So give me more detail on that aspect and the trend also what are companies doing with their cash . Nothing. Cash is growing. So and Insider Selling is up. Companies have lost confidence it looks like in the economy or in the leadership or something or other to be fair, charles, to be fair, i always Pay Attention to what insiders are doing. And their track record over the last six or seven years hasnt been great when they buy, it doesnt always go up or when they sell, it doesnt always go down you seeing anything different this time . A huge Insider Selling is, last time it was this high, maybe 09. Its spiking in august you know, august is theres a lot of not necessarily bullish things happening in august from Insider Selling spiking, corporate buying at very low levels and were also seeing outflows, significant outflows from not only so you now were switching it investors are pulling money as well how big is it. Well, could be the biggest since 09 not 09, i want to say 11 no, 13. The outflows are just accelerating its not just from mutual funds. Its from etfs as well, and money is not going into Global Equities do you think the markets are calibrated correctly for the two issues youve been bringing up, insider outsider do you think theres more room any advice for investors at this point . Your final thought ive sold some stock and turned a little bearish amid all these numbers. If these trends continue, it cant be good. Got you charles, never minces words. Thanks for your thoughts today carl, back to you. All right thank you, Rick Santelli squawk alley is coming up next dont go away. Hi. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were stuck here catching up on claims. But we just compared historical claims to coverages. But we have those new audits. My natural language api can help us score those by noon. Great. See you guys there. We would not miss it. Watson, you gotta learn how to take a hint. I love to learn. Welcome back to squawk on the street. Real estate is standing out at the best performing s p 500 sector and by a wide margin. Nearly all components are positive with kimco and Simon Property among the leaders now back downtown for the start of squawk alley. Good morning. 9 00 a. M. In jackson hole, wyoming. 11 00 a. M. On wall street. Squawk alley is live