Across the board with the exception of the italian ftse. A quick look at wti crude right now, wti if youre buying it buy the barrel, you can do it for 48. 91. Hurricane irma one of the most powerful atlantic storms in a century. Its churning its way across the caribbean towards florida. Kalee dionne joins us live from cnbc headquarters. Whats the path . Reporter the path is westnorthwest at this point the question still lies when will it turn to the north . Thats something well be watching throughout the day. The latest update from the National Hurricane center, it maintained its 185mileperhour winds. Its just to the eastsoutheast of st. Marteen, and conditions are deteriorating there. This will continue to move at 16 Miles Per Hour that pressure continues to drop. As that pressure drops, the winds will maintain that speed or continue to increase. Everyone is wanting to know where is the track i dont want a lot of people to focus on where it will go as it moves closer to the u. S. At this point, theres still a lot of questions, but at this point it continues westnorthwest towards puerto rico later on, u. S. Virgin islands and then make its way to the north as we go into the weekend. Everyone along the east coast of florida, west coast of florida, up into the carolinas need to start preparing. More updates throughout the morning. Thank you very much Hurricane Irma is disrupting flights as it threatens the caribbean and south Florida American Airlines canceled 35 flights through tomorrow to several caribbean destinations jetblue and southwest are waiving change fees for passengers the nfl postponed sundays game between the buccaneers and the dolphins the league is still considering whether to move the game to a neutral site or just play it later in the season. Lets get you caught up on some other big stories were watching shares of Hp Enterprise are trading higher the Data Technology company posting better than expect the quarterly results. Performance was helped by higher sales for networking equipment dont miss meg whitman, she will join the squawk on the street gang at 9 00 a. M dont look at me like that what . I like meg whitman. Its an ongoing no, no, no. Were kid ag rouding around faber 10, 12 years ago did a big ebay piece i want to hear from her thats why youre laughing. What do you think i want to hear from her today . About uber. Because you love what i want to hear about the earnings, but what really happened you wont be doing the interview, but she wont say anything about that. I imagine david will ask. I thought you were going to say daca im sure that the daca conversation will happen facebook another company in the daca debate being accused of inflating its ad reach in a new analyst note, Pivotal Research group says the ad reach is greater than the number of people that exist in recorded u. S. Censusdata. Facebook says its numbers are estimated at how many people are eligible to see an ad run. Not to match the census or Population Estimates the pivotal analyst maintains a sell rating on the stock with a price target for 140 for yearend this is something that continuously plagues facebook. It plagues facebook, google, snap do they reach people or dont they. We will people come on and say the number you would think digitally we could understand the numbers better than anything yet yet nobody believes the numbers. You might be right about what . Its a 404 billi 404 billion facebook you better be right, the numbers that they supposedly if theres ever extreme doubt about it, think about so many underpinnings of the market based on this secular shift towards things like facebook and google it would be a dramatic impact. Finally, lets tell you whats on the agenda today on wall street. Couple of nick reports to watch. July trade deficit numbers out at 8 30. Followed by the august ism Services Index at 10 00. And the fed beige book at 2 00 if i look at you, you might start laughing you cant control yourself its very difficult youre in the middle of a read i didnt even look at you weirdly. I know you. I know you i know exactly what youre thinking thats what makes for a great its like youre married. I dont have to explain to you. You dont have to explain to me i know lets talk markets now. Joining us is Karen CavanaughSenior Market strategist from Voya Investment management 2 215 billion platform. Karen, im not sure i like the weird little rabbits made out of dollar bills you dont like it im talking about it, arent i . Yes, you are. So its working its weird like the aflac duck any way, paul also joins us. Normally fundamentals or technic technicals do you follow. Were more of a fusion approach fusion. Thats cool. No rabbits. Whatever so whatever indicates something to you, youll you dont we incorporate different valuations midaugust you went to 30 cash, you had been at 10 cash this is about as nonpositive as you have been for the year when did you go fully invested weve been bullish since since november . The middle of last year we have through the election you stayed 10 cash. At times we got up to 10 15 ca cash in all honesty we thought the Market Reaction would be negative, but we listened to the market we dont try to so you really have been fully invested now youre less so every time ive been on this year, weve had apocalyptic headlines about russia, collusion. Korea turmoil in the white house. But every time we have listened to the market. What weve been listening to is the internal breadtbreadth, higl spreads, and every time we see a rally those confirm the rally. In the most recent rally, high yield spreads were wishywashy, the percentages of stocks hitting new highs did not confirm. From three green lights to a red light, yellow light, green light. Its mixed its not bearish, just more caution. Thats i respect you for that karen, youre mostly fundamentals im fundamentals. Straight fundamentals. Did he at this point make you think, wow, maybe the market is on a little bit shaky ground at this point no he didnt. Do you talk to those rabbits . I dont usually fundamentals look stronger than ever we came off a blockbuster earnings season with double digit Earnings Growth. Looking at earnings froth for the third quarter, which is a higher bar the Global Economics are moving forward. Manufacturing numbers are good the consumer is still spending so i dont see anything other than the geopolitical tensions while theyre concerns, theyre always with us thats always something we have to deal with, natural disasters, washington drama but fundamentals are getting stronger so a get in the market no cash investment. Yesterday mark grant talked about the trillions that invest verse put into the market, with people still moving so slowly in terms of tightening, its still that simple. Its as simple as the liquidity globally investors dont want to believe its as good as it is. Its not that often that we have global synchronization, where all the economies are moving in the right direction. It may not be rabbitlike growth i like that smooth until we get those pro growth policies, we wont see that. Thats not going to happen until we see washington do something, we continue see a lot of growth. Thats okay. Companies continue to move forward absent a lot of growth just a little bit of growth is all they need. Is the market at risk if we think tax reform or tax cuts dont happen in 2018 i think right now, all the trump trade has been, you know, we saw some optimism last year t faded. I dont think a lot of tax reform is priced in expectations are low. The only thing is on Regulatory Reform thats what he can control thats been a positive overall theres very low bar to set. To karens point before about fundamentals, valuations are a bit more than average now. We talked about this bubble in tech its one of the few sectors thats the closest to the median over the last 20 years, about 2 above its toyear median, the s p is above since 1999 the utility sector has outperformed the tech sector so tech is in line with the market right now in your notes you do note that the market is somewhat expensive. But if were going to stay down here at 2 if you use the tenyear where it is now, that would be the terminal point for fed funds, if thats where they stopped raising, thats really positive, isnt it yes valuations are allowed to be higher valuations, a, you have to consider the alternatives, b, has there ever been a bear market that started strictly because of valuations . No, you have to have another catalyst to get the move going in that respect, again, we have raised a bit of cash here because were seeing internals of the market and listening to what the market is telling us, overall the picture is not necessarily as dire as you see some on some of these headlines with north korea a recession can bring on a decline in the markets historically when you look at that tenyear we just put up, it really started to decline over the last the yield curve does that get you nervous . It is sending a signal that there wont be a lot of growth unless we have change, and theres been no policy change. But the economy and the market are not the same thing just because the economy is not rocketing up, it doesnt mean the market will go down. Companies its the companies that are making the money. When the companies are making money, then were going to see the market move ahead. But that decline in yield does not signal to you, you dont worry about the r word yesterday. I dont worry about the r word it says theres a lot of geopolitical risk, washington drama. Why doesnt it say its global now and that everybody in the world has lower rates than us so the money is coming here absolutely. Who in europe who in europe has higher yields than us its like countries that are barely they may not even be portugal and a couple other countries that we know, theyre the only countries with higher rates than us why . Because its just a low growth global environment. Mario draghi is drag his feefee dragging his feet. But what has really changed in europe we havent seen structural change so therefore this is a lowgrowth environment until we see true change. I think people buy that tenyear when the sabres start rattling. Absolutely. The dollar has not been getting strong on that, yields have been the trade you should have done the last six months is when the yield hits 2. 2, you buy. When it hits 2. 1, sell just do that over and over again all because its been in that range. Your point we didnt know it was going to stay in that range. We havent seen the dollar rally, you would normally see the dollar rally copper is outperforming gold weve seen gold rally a bit, but the dollar is down so far, you should see gold rally. If geopolitical concerns were a major worry, we would be seeing copper underperforming gold. You would think oil would be much more expensive with the dow so weak. That was before horizontal drilling if oil prices cant rally in this environment, where can they rally. All right karen, thank you paul thank you does the rabbit have a name val val really . I think its val. Vernon. Theres a green one and an orange one the squirrel is green is that a squirrel . Theres a squirrel. Hes for your now money. And the rabbit is for your retirement i thought it was a ferret a nice marmot who is your ad agency . We do we have our own. We do our own they do it inhouse nice. Maybe you should hire no, no im kidding. Thats fine. We want to get to washington and try to understand the policy implications of whats going on over the past 24 hours the Trump Administration ending the Dreamers Program known as daca, but the president urged congress to enact the legalize the act. The president did decide to end that program but doing it with a sixmonth window so nothing will take effect until march of 2018. The president said that will give an orderly winddown period and give congress the opportunity to pass new legislation to decide what to do with the dreamers, those are those immigrants who came in as children who are now young adults and have been living in the country their entire lives the president speaking to the press yesterday said that he was compassionate towards those who had come in as children. I have a great heart for the folks were talking about, a great love for them. People think in terms of children, but theyre really young adults i have a great love for these people, hopefully congress can now help them and do it properly in speaking to members of congress, they want to do something and do it right. And really we have no choice we have to be able to do something. I think its going to work out very well and longterm its going to be the right solution a large group of ceos spoke out against the president s decision saying it creates an unnecessary wrinkle for their employees. Jamie dimon put out this statement saying america is and has always been a country of immigrants we should do everything in our power to attract the best and brightest because they make us stronger as a people and as an economy. We saw statements from Mark Zuckerberg and other Business Leaders echoing jamie dimons sentiments there late last night the president put out this tweet which sort of clouded the picture a bit. The president saying congress now has six months to legalize daca, something the Obama Administration was unable to do. If they cant, i will revisit this issue not clear there what the president means by revisiting the issue, whether he would contemplate extending daca or Something Else at the sixmonth mark if congress has not done anything the president putting a lot legislatively on congress plate that already has a lot to do with tax reform and a bunch of other issues that are mustdos for this fall. Very busy agenda ahead while you were talking, i was looking at that tweet. Thats the latest information we have i think its clear what te he means. If you want to put it in a positive light, its like hes trying to move to get these guys to do their job, if they dont, ill revisit the issue and ill find some other way to help if he feels compassion for these people, has a love for these people while theyre here, hes giving himself an out to not he is thats the way i saw it, too. As a matter of negotiating with congress, congress does not have a brilliant track record of accomplishing things, particularly this which is a contentious, cultural issue. Its a tricky issue. To give them six months to accomplish that is not a whole lot. President obama in doing it said i know i dont have the authority to do this, he had the senate, the house and the executive branch for two years and did obamacare instead of immigration. Couldnt get it done. Then they did executive orders for this. They also obama had a number of democrats who wouldnt vote with him on this. He couldnt persuade his entire party let alone the republicans. Which is very telling, right . Sure. Even the party that professes to be uber supportive of immigrants cant wont even extend Political Capital to them it tells you how contentious an issue it is. Absolutely contentious. In some states more than others. You look at the landscape now and you try to figure out what is the road map for a legislative Success Story here you dont hear a lot of kumbaya and bipartisanship on capitol hill is there a bill that can be done maybe. Maybe im just a pessimist its got to come through the whole reform where they move through the merit system this becomes something thats rolled into that you rethink the whole way we do immigration. Thats a big lift republicans wanted a wall, too. They want to rebuild the wall. Its saying that will take years, not six months. Youve already seen some prominent republican senators say if dwoe this, wewe do this doing this as a standalone. Theyre saying well add some other things to it could you see a deal where they add border security, wall funding, the dreamers, attach that and make everyone swallow hard and vote for it maybe thats the deal that gets done how much does this muck up the rest of Everything Else . Thats what hes saying its not getting done in six months theyre struggling with tax reform the president has been at war with mitch mcconnell, in a war of words with him. That was difficult now you added another very emotional national complicated issue on top of that its very difficult to do. Look at congress track record, its not terrific. Eamon javers, thank you very much. When we return, the prospects for tax reform well tell you what the issues on the table are at this very moment and what it could mean for the investing community. Well talk about that next we should mention tomorrow becky quick will be back shes going to have an exclusive interview with darren woods of exxonmobil thats tomorrow morning at 6 00 a. M. President trump met yesterday with his six main advisers on tax reform one issue that remains in the balance is car rried interest, which some argue should be taxed at a higher rate than ordinary income but it may not matter as much as you think for the henl fu hedge fund industry. Secretary mnuchin made it clear when it comes to carried interest that Hedge Fund Manager also see their tax loophole disappear. Its less uncertain what will happen to real estate investors, but hedge funds no more carried interest for them. But Hedge Fund Managers are not worried. In fact they receive very little benefit from the way the tax is carried. Their Capital Gains are already taxed at higher ordinary income rate in order to be taxed at the rate of Capital Gains they would have to hold the position for 12 months or longer which is a rarity in the Hedge Fund World the one loophole it is closing will do so regardless of the tax reform the irs allowed hedge funds to grow offshore for decades, so now that will end that loophole has them more concerned than anything related to carried interest i always heard about the carried interest being related to private equity and whether or not they would get to keep it. Thats why its so easy to get rid of nobody pays it for a hedge fund so they can be bold and say were getting rid of it. From a political stan