Markets where startups and Venture Capital wont even go because dominant players are so big. Now, the committee is saying that it is getting pushback from Internet Companies who allege that they actuallyvation and not well bring you all the latest back to you. Thank you well be back with you joining us to break down the are market action, megan, good afternoon to you lets check the markets. Dow is flat. S p down 0. 03 , and of course any positive close for those three would be a record alltime closing high megan, relative softness today compared to of late. What do you think is driving that part of it is trade we heard words from President Trump around the risk of higher tariffs and that is something that weve been particularly cautious about we did get a trade truce if you will at the g20 but nothing really changed there. And so i think that what we saw is a little bit of weakness from the market on the back of the reality that we could get higher tariffs down the road. But that is countered by very strong consumer data that we got this morning so retail sales were very good and give us further assurance that the manufacturing showdown is not yet oozing into the services or consumer sector. So supporter discretionary is holding up and even some of the industrials which is perhaps surprising given the trade rhetoric and lets drill down into other big stories. Julia, the hearing on libra. And kayla has the President Trumps comments on trade. Meg ter ril has a break down of Johnson Johnson results. And phil lebeau on tesla lets begin with julia on Facebooks Libra coming under fire member of the Senate Banking committee attacking the head of the cryptocurrency division. Sherrod brown saying that facebook does not deserve trust 37. Like a toddler who has gotten his hands on a book of matches, facebook has burned down the house over and over. Facebook could monetize users data saying that they are committed to gaining all necessary Regulatory Approvals getting this right means addressing these concerns in full and ensuring that there is proper regulatory oversites for this project and marcus saying that the swiss Data Information commissioner would be the regulator and that until today they had not been contacted by facebook or libra. Facebook said that they have not yet contacted them but look forward to meeting with them and working together back to you. And jamie dimon on the Earnings Call for jpmorgan didnt seem particularly threatened by the sense of libra. Do you feel like that the Company Might live to regret announcing this because of the extra pressure it has focused on from regular late tors this is certainly a time when facebook is under so much scrutiny. Late tors this is certainly a time when facebook is under so much scrutiny we heard concerns about data and privacy, how they will be regulated in terms of data and privacy. And that falls in to other conversations and regulatory scrutiny of the need for more privacy regulations. And also the sense that facebook is just so big, several senators referenced that facebook is too big and this would give them even more power. So the timing is tough and then also the question of whether facebook came out with this idea too early. They havent even reached out to the regulator, swiss regulator, who would be overseeing the issue. Was it smart to get out early or are should they have waited a bit. Julia, thank you. Megan, even so with facebook under fire, stock unfractionally it is exciting i think from what they are announcing in terms of the cryptocurrency. And a lot of the skepticism i think comes from the combination that it is facebook and we know that they haved a privacy challenges before and also the skepticism about bitcoin and often when we talk about libra, we are hearing it in the same send send as bitcoin, but it is actually very different, at least their plan. And we heard that from david marcus they are trying to not treat did as an investment that is one of the functions of money is a store of value and i think bitcoin has a very volatile store of value and that is why people use it for that investment potential libra is a transactional type of thing. And i happen to think what facebook is doing is very smart in getting out ahead of all of this they basically just outlined a plan, a white paper if you will, and they are looking for the rec late tors to take the lead on this and give them guidance so they can move forward. Facebook up 0. 2 and there are trade headlines from comments from President Trump which weighed on sentiment. And Kayla Tausche has that they are familiar in what they said. The president saying chinas economy is weak, that there may or may not be a deal, if there is not, no problem, no tariffs and china may end until buying some Agricultural Products they are supposed to be buying farm products, lets see whether or not they do o ag, great farmers. But out of the tariffs, i took 16 billion to make up for the shortfall. The white house has authorized 28 billion to offset the retaliation on the farm community. The New York Times obtained data showing 21 billion in proceeds for the u. S. From tariffs so far but those are largely paid by u. S. Importers earnings season kicking into high gear as three more big banks report results and wilfred has the big takeaways from wells fargo, Goldman Sachsjpmorgan. So key theme is weaker net income than expected jpmorgan had to cut full year net year income guidance by 0 500 million stocks down biless th lesby les. Wells fargo net income guidance also disappointed. Million. Stocks down by less than 1 . Wells fargo net income guidance also disappointed. May not fall next year having previously guided to 50 to 51 billion. Goldman sachs trading higher because it is more tilted to fee income than Net Interest Income. That is spread across multiple divisions. And they are investing and lending business bottom line exposure to u. S. Rates is weighing on guidance this quarter but exposure to markets has been less bad than feared and looking at the two day chart, Goldman Sachs is the best performer. Wells fargo the worst. Theme therefore bodes better for Morgan Stanley for thursday than it does for bank of america tomorrow megan, what is your takeaway i think that there are three main drivers for the banks one is the fed and we know that that is going to be a head wind on Net Interest Income. But also the shape of the yield curve. Weve seen that steepen over the past few days. So that is a little bit encouragi encouraging. For us the most important thing we see is credit quality and that has been good and reassuring we know fed policy occurs with a lag. So the fact we are not seeing that weigh on the credit quality so far is a good thing were still neutral financials within that, we prefer the larger banks over your regionals. Because you do get are more of the diversified revenue stream although in this kraur if may be a headwind, but longer term we think that that is the safer place to be. But a lot of the we think that they are fully valued so maybe less down side risk from valuation and things like that but admittedly few up side catalysts at this point. Sticking with the theechl of earning, Johnson Johnson also out with results meg ter ril has the irrell has. And they raised full years sales forecast, but investors dont appear to care their ceo told us that the company will continue to defend itself but the legal uncertainty means some investors dont see j and j as the defensive stock it had been back to you. And switching gears to tesla, the company said that it was cutting the starting price on its mass market car the model 3. Phil lebeau has more in chicago. Cutting the price but raising the price actually on two other models the s and x. They are doing away with the Standard Range model so result the lowest price you will now be able to get the two vehicles jumped up by a couple thousands. With regard to the model 3, that is dropping down under 39,000 a decline of 510. Still not the 35,000 which is what elon musks goal is, but now down under 39,000 as a base price. And as you take a look at shares, this is a company that reports financials next week, and you can bet that there will be a lot of questions especially about elon musk saying today starting on august 16 the price of the full selfdriving option goes up by 1,000. Back to you. Well see you later in the show for United Airlines after the break well take a deep dive in to wells far go results with their ceo and were a waiting two big earnings reports, csx and United Airlines well preview the most porntsd thi important things to watch. And as we head to break, a check on our closing bell data tracker. Retail sales up 0. 4 and july nahb home builder confidence forecast also beating estimates. We have 45 minutes left of trade. Any close higher would be a record right now a mixed picture. Mike santelli has the market dashboard. And here is what we have coming up. First value capitulation and then sluggish transportation trader adulation and most favored nation i know that ultimate be able to come up with the theme here. I got a rhyming dictionary your asian creation there you go. So well get to value versus growth, freight volume, Trader Sentiment, refuggional stock market but first something from the survey this is the net percentage of respond geentss saying value stocks, so essentially after a very long period of most managers saying that it is time for value to start working better than growth, growth has outperformed too much, it seem like they have kind of given up. Of course it cango below zero. But right now it seems that is a bit of a give up trade this is a russell 1,000 value index. And it has been on a steady k decline. Value was compelling and only 1 of fund americmanags seeing an up side to global inflation. Inflation would benefit cheaper stocks so whether there is a key inflection point, i dont know but definitely getting toward some kind of an extreme. Mike, thank you megan, any surprise to see a chart like that given the fact you do have all this easy money kicking around in the world right now . We get a lot of questions from our clients about value versus growth and is there any point in being in value at this point. And it is for good reason. Some of the biggest leaders in the market are growth type tech related stocks i would say our expectation is for usgdp growth in the 1. 5 to 2 range which is slow growth. And in that tine of viype of ent you will see demand for those stocks that produce their own growth which support the trend weve seen i dont think that we will see a sharp reversal in value versus growth, but we say maintain some exposure to value. But it will probably be more even from here we did see the yield curve steepen. That is helpful for value. I think that inflation doesnt necessarily have strong upward risk, but it has been stable we dont necessarily get that because of what were hearing from the fed but going forward, i think that it is still a growth market. But you dont want to be totally out of value and lets move on and talk about wells fargo. Lower today despite beating earnings estimates bank citing a low Interest Rate environment. Stock down 3 . Joining us for more is the wells fargo cfo. John, thanks very much for joining us good afternoon. Thanks for having me lets kick off with the key factor of all the banks earnings and Interest Rate environment and the relatively soft Net Interest Income guidance what are you using as your base case for rate cuts in the year ahead and to what extent is there room to offset lower rates with lower deposit rates given that they werent hiked that much during the rate hike cycle . That is a good point. As it relates to Interest Rate forecasting and what it means for Net Interest Income, we have we run scenarios with these days between one and three moves by the fed and whether it is a 50 basis point and 25 or three 25s. Some version of that fits in to our current guidance halfway through the year that feels about right. Bigger picture though is the deposits and what we pay for them and what were earning on the asset side as well in the Second Quarter, setting ourselves up for the rest of the year, we had a 6. 2 billion worth of net income, we generated more assets, more loans and more deposits than we had a year prior a lot of business fundamentals are feeling really strong, so another part of this story is if these rate cuts do actually extend the recovery that were in, one of the benefits for banks and for Bank Earnings as a result of having softer credit, having a stronger consumer, having a Consumer Spending for a longer period of time and keeping borrowing costs low which encourages people to spend and invest at the margin, all of those things factor in you asked when deposit rates and youre right, they have not moved up they have not fully reflected where you might have expected them to go after a few years of fed rate increases means that there is less room for them to go down on the other side. And that is what is leading to this expectation of margin compression and i think all of the banks are signals thing that there will be some element of that and the other reason i think share price is down today was from the Earnings Calling the fact that you guys lowered the amount of cost savings that you might be able to deliver in the next 18 months what is happening there, the government making you spend a fortune on compliance . No, two things. We have efficiency 3r578s thafen place. And whether taking advantage of our scale or the change in business that is leading to more selfserve and automation and other things that make us more efficient, that on the one hand, but there is a need to build both in our risk function as well as in all of our businesses more complete and robust risk and control capabilities all of which are have a component of technology that supports them and those have been expensive and as we have gotten further into it, as we have added more leadership, they have continued to be more expensive so we are operating in the low 50 , we should be in the high 50 in the mid to high and it will take us a bit longer to get there but what were spending money on is making us a Better Company and better controlled and gives us a path to being as efficient as we can beyond the other side. But youre right, that was disappointing to our investors on the call your interim ceo addressed the point that he is still the interim ceo. Lets take a quick listen. When the board asked me to take on the interim role, i assured them that i would do the best i could for as long as they need z ed me and that is what im focused on, trying to move the Company Forward to the best of my ability but from the beginning they said that she wou they would be seeking someone from the outside there has been a number of reports that the job has been offered to people on the outside. Do you have any idea why they havent taken the role im sort of taking it from our board chair in particular who is making the point that the committee is working hard, this time frame that were under frankly from my perspective having recruited senior people, not ceos, but into our organization, it takes a bit of time and they will get the right person and i think allen is doing a great job in the interim, he is doing the exact job that they asked him to do. And it has been clear from the beginning that they are looking for somebody from the outside. And they describe bed the reasons at the time. So i think that it is a great job, certainly a Great Company and a big opportunity for somebody i want to the comments about investing in technology. What is the wells fargo vision for Consumer Banking in the future especially as we talk about digital tokens, as we pay more and more attention to startups that are Venture Capital backs taking out banking charters what does the sector look like and what would somebody like me as a consumer, what would that experience be in the coming years . Sure. So whether legacy banks like ours or many of the people in the ecosystem of finteches competing with banks for Customer Business and changes the experience, it is all about convenience for the customer it is about access to your information, access to your assets doing things in one place. Sometimes it is a la carte but you probably want it all on your phone i think increasingly the demands for personalization so that it is clear what your bank knows about you is brought to bear in how they respond to issues that you have, how they describe and promote value for you, that you never have to tell them something that they should already know and that they can anticipate where you are in your earning, in your spending, your saving for retirement, et cetera all of that is it part of the ganging experience and those are the areas that were focused on. As it relates to the fintech charters, i will be interested to see how some of these companies who brate in a lightly regul operate in a lightry regulated environment manage through privacy as it becomes bigger issues on top of the consumer experience, on top of law enforcement, on top of many laundering, all sorts of things that come to bear as part of being a Financial Services provider and all of that has to work in a seamless experience for the customer john shrewsbury, thanks for joining us of it area the break, Morgan Stanley says t