To report. Also trade representatives set to kick off a new round of china talks in shanghai. Earnings less than an hour away, well preview the key things to watch from that report with the stock up 800 on this 25 ipo price. Steve grasso from stewart frank, and a lot of moving parts, what do you do . It feels as if everyones on hold for the fed thats the most important thing thats happening right now earnings this surprised to the upside everyone usually, even last quarter, even was ready for a a into the earnings cycle. Steve is here with us for the full hour, and well be dissecting the market moves. Lets focus on the big stories the pharma deal, more fallout for boeing, and eamon javers. Viagra, lipitor, xanax and the epipen, pfizer is going to spin off or divest its up patent business and combine with mylan, and the new company will do about 20 billion in annual sales. It will get a new name and be domicile in the United States, a fact that could be attributed to u. S. Tax reform and an element we saw in the recent deal avi acquiring, allergan. Those talks moving in opposite directions. Pfizer dragging, mylan getting a much needed boost. Mylan has been challenged forever so they needed this deal they get a management shakeup. Pfizer needs to create something other than what they already have this gives them a different pipeline, so to speak. So obviously you see the price action thats what you would expect off the headline pfizer is probably a buy. Do you like the defensive tone on this the problem is yes to the dividend arm of it the problem is drug prices and this entire space is under fire from not Just One Party in washington but both, and this seems to be the only thing parties in washington can agree on this will have that target for the next couple of years. You like the pfizer trade off. Turning to boeing, frustration is growing among airline ceos over the companys 737 max. Phil lebeau with the latest from chicago. Ryan air pulled no punches talking about the uncertainty of the 737 max deliveries. We were originally expecting 58 aircraft for the summer of 2020 now 30 at best, it may well move to 20. It could move to 10 and it could move to 0, if boeing dont get their [ bleep together. Michael oleary said that he believes he was told over the weekend that boeing does not expect to have the 737 max software fix, it wont happen until october. He thought it was going to happen in september. We reached out to boeing, they said theres no change at all in the 737 max time line. This is what investors are focused on it is the production schedule. Right now it is at 42 per month. Remember, just last week, boeing ceo, Dennis Muilenburg said if the return to service is pushed out any further, there is the possibility they could halt production the New York Times out with an article over the weekend looking at the relationship between the faa and boeing in terms of the certification process. Boeing says the certification process has been in place for years. It has delivered a lot of safe aircraft over the last 20, 30 years. Its a process that has worked obviously whats going on with the max, was it a case where the faa was no strident enough in terms of checking on the key things that needed to be checked on for certification. Phil, oleary always speaks his mind thats why hes always such a good cnbc guest. Remember when he wore that flag outfit on brexit day. Exactly a great example. Speaking his mind there. Is that a sign that perhaps this is in fact what the ceos of all the airlines think privately but oleary is the only one to voice it publicly. Yes, in talking with executives in the airline industry, they are frustrated that they have the same amount of information you and i have. Its not as though theyre calling up boeing executives and boeing is saying heres whats going on the one phrase i hear from executives is were in the dark. That uncertainty combined with delay after delay after delay has frustrated Airline Executives were going into the holiday flying season, the second busiest time of year they planned on having these planes they wont have these planes therefore you get the reaction like you get from michael oleary. He said of rival align, norwegian, it deserves to go bust, its shocking. Calling out a rival to go bust. And he put a time line on it. I wouldnt be surprised if you see it happen by late september, october. Norwegian, they have exposure to the 737 max, and there are a lot of other airlines that have that exposure too, and we have talked about this before, its not like you can go down to the 7eleven and get another commercial airline. Their just not out there if you cant meet capacity demands, thats got to change. These are the clients this is who boeing has to sell to growing frustration. Ty heard it from gary kelly whos maybe not as forthright or comes with the curse words as ryanair ceo, but is it going to do longterm damage . It probably does do longterm damage but the question become ifs you or somebody like gary kelly, why doesnt he switch to air bus. First, hes not going to get planes right away, also thats a multibillion dollar decision to change from boeing and air bus, and vice versa because you have your mechanics and pilots and crews that are certified under certain air craft. You just cant switch on a dime. Its not like going from a toyota to a honda. Its a Huge Investment and huge decision while it will do damage, its not something, at least the p perception is its not where youre going to have your longterm customers say im not going to fly you anywhere. Saying they have no route in reality, steven, back to boeing, key levels youre watching for this. At 357, lets call it about 5 percent higher from here its a no touch. You dont have the suppliers, the customers have no clarity. The faa has no clarity no one has any clarity on the situation, including boeing. How do you buy a stock when you dont know what the true story is in the name i think it has to prove itself its had an incredible run over the years. Go to the airlines that dont have any exposure. Delta is up 25 year to date. Still expensive down 1. 4 . U. S. Representatives are heading to china for the latest round of trade talks eamon javers has the latest from d. C. Reporter as i stand here right now, you just dont get the sense this is the week where people think theres going ton a major breakthrough in the china negotiations we know the treasury secretary, Steven Mnuchin is part of the delegation, robert lighthizer, the u. S. Trade representative part of the delegation thats on the ground in shanghai the question is what to expect from this. White house folks i have been talking to today view the fact that they are having these talks this week at all as the success. You ask them whats the deliverable, whats the outcome from this, the outcome is the fact that they have put on this round of talks this week and therefore you dont get a sense there are anything but low expectations this week. Nonetheless, they are moving forward, they are talking, gives you the sense that there might be a path here to a more normal negotiating stream going forward. Well see whether that can bear fruit but for now, just the idea that the talks are on again, people are smiling about that at the white house. No step backwards, probably the key thing for the markets. The feds policy meeting kicks off tomorrow with the expectations for the first rate cut since 2008 former fed chair janet yellen weighed in at an Aspen Economic Strategy Group meeting. Although the u. S. Is doing well, i would be focused on wanting to keep it doing well, to keep the expansion on track, and i think in light of the risks, i would be inclined to a cut a bit. I wouldnt see this as the beginning unless things change of a major easing cycle. Lets bring in economic adviser, managing adviser at , s this not unheard of, calling out a policy decision. I think theres a reason janet yellen did this. I think shes trying to help her successor. I think theres a lot of people in the market who say if the fed cuts, theyre reacting to political pressure from the white house. I think janet yellen wants to help preserve the credibility of the fed by saying no, its the right thing to do. There are actually good reasons for cutting Interest Rates, so i think shes trying to help. The fact that thats needed, does that not highlight the extraordinary position were in. Is it plausible that the current fed chair asks for her help in this way. Im not sure he asked for it, but i think he was probably quite glad to hear what she had to say because this actually reflects recent fed communication. He went out of his way to talk about the need for an insurance cut, the global uncertainties, global slow down that is unfolding and these are exactly the records that janet yellen repeated this may not have been coordinated but welcome by the current leadership. Were in unprecedented times when the president weighs in on the fed on twitter constantly, days before a fed meeting. Does that ultimately influence the fed in any way or does it make the stakes higher for tomorrow based on how President Trump is going to react because we know hes going to. I dont think this influences the feds decision there are good reasons for the fed to cut Interest Rates. They have been talking about this for quite a while they are following the Economic Data also its an exercise in risk management, given the global slow down, and also there are, you know, theres a good reason to cut because inflation has consistently fallen short of target, and there is a risk that inflations get anchored below the target i dont think this is a reaction to what the president has been asking for i think the fed is doing the right thing, and the real question is, you know, is it going to be 25 or 50 whats your take on this i would have thought that janet yellen would be helping powell by saying they werent due for a cut. The perception is President Trump has pushed him into a cut, and we shouldnt have a cut, and hes doing something against his will i dont know if this is helping powell as much as its helping trump. Hes putting pressure on powell to cut when he didnt want to. Shes back the trump dynamic that we need a cut we have seen the feds come out on both sides of this. We have seen powell change gears. Now hes a dove. And we have seen rose and grant, hes a screaming hawk. It seemed to be before the blackout of the fed, so i think if janet came out and said we shouldnt be cutting, that would back powell more because the perception is he doesnt want to cut. You could have made the case for this cut. It shows a monetary authority, a former Federal Reserve chairperson supports a cut, forget the politics of it from the time she was raising to the time when powell wanted to raise, theres been zero inflation. The phillips curve is dead theres been a reason to not raise rates. You cant normalize. What im worried about is the fact that they dont have any ammo to further their endeavors in case we run into a recession. You need 5 or 6 to cut down to 0. We dont have that ammo anymore. Thats out there. The mystery i think is in what message powell will deliver on the cut. Will this be the start of an easing cycle will he hint at more cuts as the market expects or will he say, okay, we did our job its the framing of it that i think leaves room for interpretation is that a question for me, sarah . Yes, what do you expect him to say around it i think its going to be a dovish 25 basis points cut they may go 50 but i think its more likely 25 but with dovish language they will probably also announce along with it that they end quantitative tightening this month in july, rather than september as previously planned. I think he will leave the door open to another cut. Otherwise i think he would risk disappointment in the market joachim vels, thank you for joining us. A big test after the board, up next, well take a look at the stocks enormous rise. Were looking ahead to apples earnings tomorrow. Were discuss what wall street wants to see from that reporter. The dallas feds july Manufacturing Index comes in at 9. 3 up from 8. 9 in june. Dow is up 32 well rhtac beig bk. Tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Wake up theres a lot that needs to get done today. Small things. Big things. Too hard to do alone things. Day after day, you need to get it all done. And here to listen and help you through it all is bank of america. With the expertise and knowhow you need to reach that blissful state of doneness. So lets get after it. Everything is all right what would you like the power to do . ® all right what would you like the power to do . ® Xfinity Mobile is designed to save you money. Whether you use your phone to get fit. 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You know what they say, dont go to the supermarket when youre very hungry same thing applies when it comes to putting chart packages together i heard the music, hungry like a wolf heres the dashboard today totally stuffed, a stock that looks totally stuffed after the first course only the choice cuts, the preference in the market for the highest quality assets, we have a way of illustrating that, and eating machines, certain automated traders eating up stocks right now, and then a well fed bulls, which could be the case once we get this rate cut as expected if we get it as expected this week totally stuffed. I was looking at the performance as we all have of beyond meats since its ipo, less than three months since it came public at 25 a share. At the highs, the stock was up 800 i asked the data team to go back and look at all time great Growth Stocks and see how many trading days it took after their ipo to rise 800 , and here you see beyond me took only 85 days. Amazon was the fastest of the other ones and then you can go down the list, microsoft, 1,400 delays, starbucks, over 1,500 days, and then google, public in 04, 29,608 delaays. Investors have front loaded this vast opportunity you cant look at any other stocks and say beyond meats ultimate Market Opportunity is bigger and less appreciated at the ipo. I dont believe anyway it shows how high the bar is. I dont want to offset that extraordinary statistic for beyond meat but was it fair to say it was the smallest of all these companies when it ipod. I believe it would have been the smallest, although starbucks came public at a relatively modest valuation, and its very true that microsoft was already a giant Great Company when it came public, google was highly hyped. You could make the argument that at the ipo price, beyond meat was completely depressed relative to its opportunity in terms of valuation, but nonetheless, 800 in three months is a pretty big helping no matter what. Go get some lunch, mike, well see you in just a bit. Also small float is that healthy or unhealthy it depends on if youre talking about the product or the stock. All of the above. I think its unhealthy, you have everyone waiting for it to explode, when it does implode, do people carry that to some other meaning with the overall market, and i dont think it does have a meaning. I think the float size is very important. Just explain that shares that were issued so theres a scarcity in the share size or share amount that was issued you have this clamoring of people trying to buy up the shares, and a clamoring of people trying to short it, and when you get positive news, theyre forced to cover. No doubt big moves expected. Under an hour to go. After the break, were sticking with the food theme with analysts of upgrades and downgrades in the restaurant space, the names wall street says to buy and sell and reactions. Chief economist predicting a 50 basis point cut this weekend. Hell tell us why. Dont go anywhere. The closing bell will return welcome back to closing bell, weve got under 40 minutes left of trade time, a food themed word on the street. Everybody is hungry today. Atlantic equities initiating as coke and pepsi as overweight with a 62 and 145 price respectively citing sustainable growth. Deutsche bank initiating dominos as a sole with a 208 price target the firm basing this call on what its calling competitive intrusion of Third Party Delivery aggregators, which Deutsche Bank says creates an increase in choice for dominos customer base. They were first at nailing the delivery theme. But not everyone does it. Theres a ton of competitors. Downgrading starbucks, removing from the Companies Fox list the firm says the stocks share Price Performance has exceeded expectations and forces a downgrade. Jp morgan, traffic is down 1. 2 . Goldman sachs with a buy on chipotle, mcdonalds, putting a sell on jack in the box and wendys, i wanted to come back to the starbucks one jp morgan when it put it on the conviction list, had it on 20 times, has it 30 times now commends it for the performance of the underlying business but the stock has run up incredibly on the multiple line as well i think theres stocks that are going to get a multiple expansion. Youll see that with mcdonalds, and they have the digital asset, dynamic yield that makes them more efficient they get 70 of the revenues are driven through the drive through, so that experience, the more efficient you can make that, the more it drops the bottom line. That deserves a multiple expansion. Mcdonalds does. Mcdonalds does starbucks is up 50 . A lot of people think to your point has outrun its potential theyre up 65 year to date or thereabouts. Its odd to me that you would be backing names so long in the tooth. Youre talking about the goldman call, chipotle, sacs, i get the mcdonalds i can make the case for starbucks. When you have the other names, those are a