Plus Consumer Confidence slips but less so and bill dudley says the fed shouldnt enable the disastrous path of trade war es ka ligs and should attempt to influence the election not cutting rates further. We have it all coming up in hour joining us for the hour is steve grasso here at post nine good to see you. Good to see you. A wobbly session today in terms of the market. Up on the dow. That didnt hold but we are also kind of oscillating off the lows here still within this monthlong range. I think its about yields german yields, negative yields around the world probably heading even lower from there and taking the equity markets with it. Thats it from the 50,000 foot up and now trade headline, dudley today writing today and trump tweeting dudley in any other news day i think dudley should have been the focus from start to finish but when you have rates and when you have headlines on trade that kind of gets lost in the shuffle and been covering it quite well but that to me is something spectacular as a former fed official talking in those terms. That should be a knee jerk reaction to the marketplace. How divisive this has become and almost trump against the fed but realize boit realize both of them on the same side of the u. S. Same objectives it is getting chatter and well continue to talk about it. Also, hard to find a lot of people siding with dudley on this as far as i could tell in this particular point he made. Out in the open. Yeah. It was odd to me to go on the record and say this. This seems like a little bit of suicide on a personality or a character assessment. Contributes to the debate of the politicization of the fed. Correct you want to think its an independent body, thinks for itself and goes on just whats best for Economic Conditions and it has a totally different agenda but the feel from this is its become such a spat that it gets into the psyche that we are not dealing with computers but personalities here. We should point out again a former fed official and getting into that story, as well lets focus on the big stories we are watching today. Bob pisani is tracking the market Rick Santelli with the signals of the bond market and ylan moy is following the fed. Stocks with 10year yields. Down in the morning. Stocks following relationship holding there stocks come off the lows banks weaker all day on the lower yields the bank etf, thats the kbe, threatening to break to new lows for the year and also seeing weakness in consumer staple names i think for a specific reason smuckers weak on poor earnings and guidance they talked about deflation their pressure in coffee and peanut butter. Elsewhere, the new high list, again, littered with the defensive reits and utilities. Thank you turning to the bond market as a key recession indicator flashes red once again rick has more on this in chicago. Rick i agree markets acting like a key recession ipd kay or the i think its an indicator that markets are screwed up bobs right. Paying attention to rates today because theyre guns hots. All making new cycle low yield close. Welcome at the drop just since july of this year of 10year notes. Finally, lets go to may of 2007 last time 10s and 2s inverted. Now minus 4. Mike, back to you. Rick, thank you very much now to the fed as a controversial oped and a president ial tweet ramp up pressure on jay powell and the central bank ylan has that story. The beef starts with bill dudley, the former head of the new york fed calling on the fed to stop cutting rates to put President Trump on the hook instead. In an oped of bloomberg he wrote, quote, Central Bank Officials face a choice. Enable the Trump Administration to continue down a disastrous path of trade war escalation or send a clear signal that the president will bear the risk the fed said that its policy decisions are guided solely by the congressional mandate. Political considerations play absolutely no role then of course trump himself weighed in tweeting that the Federal Reserve loves watching the manufacturers strulg with the exports and that our fed is calling it wrong for too long. Dudley also arguing that reelecting President Trump could be a threat to the u. S. And Global Economy but the fed is clearly rejecting the idea of trying to shape the outcome of the election, guys definitely a fiery oped. Im just curious is there a press departmecedente how usual or unusual for a former fed official to pen an oped like this . Highly unusual. The remarks are stunning, controversial. But i would point out that the fed is not shy in the past about saying that it doesnt want to be stuck with the short straw and not sporesponsible for stimulating the Economic Growth and recovery in the financial crisis, ben bernanke said that congress had a role to play, as well. That it should not send the country over the fiscal cliff, it should pass stimulus measures and that was very difficult for congress to do so the fed had to act but that is something that the fed often a role the fed has to play holding the short straw and being last man standing, last backstop for the economy. Yeah. And of course, a bit of traditional view that the fed sometimes not seen as changing Interest Rates in an Election Year because of fear for seeming an undue influence. Thats a side consideration not a primary driver but certainly, the idea that the fed operates in a political vacuum is not true theyre aware of the political pressure thats all around them but the idea that this is a primary motivating factor in the decisions certainly is something that the fed had to be clear about pushing back on. Absolutely. Thank you very much. Stocks trading back up toward the flat line actually with 53 minutes left in the trading session. The dow down 17. S p 500 just nosed above the flat line and nasdaq russell 2000 small cap is consistent underperformer. For more bring in john kadunis john, good to have you here. Thank you. Talk about the general position here of markets we have the stock market really unable to escape the gravitational pull for now for the short term of the bond yields going lower. It tells well have a volatile market for the unforeseeable future theres so much going on in the event risk that every days going to be depending on what the president tweets, what headline comes out, what the yield curve is doing, whats going on with the china situation and the trade war. Were going to have volatility it is here to stay the question is, how do you n navigate through the markets how do you navigate the markets, john . How do you counsel investors right now . We are telling our clients and seeing a lot of people start to look for right now its important that, number one, youre invested in the markets you just dont shy away because youre scared of volatility. Number two, you have to be an active manager to be able to navigate through the volatility that is clearly here its a stock pickers market you cant just blindly pick the entire market because theres going to be some gems out there that you have to have professionals look at. So i think its very, very careful but you have to be invested and you have to look for people that are going good risk managers and thats been very successful for us in the last, you know, couple of years. Our liquid alts is something thats been very attractive to the customers and buying products like the Market Neutral and just became this month the largest liquid all fund in the world, almost 8. 5 billion where it does not concentrate on what happens with Interest Rates. So its neutral for that convertible Arbitrage Fund and sells options to get some yield so no matter if the Interest Rates go up or down its a consistent return. Just to be clear, liquid alts is in a liquid kind of mutual fund platform. Steve, we just talked about how the market seems like its following yields by the nose and on the other hand lower yields should be supportive of stock valuations its a push pull right now. It depends on the backdrop they happen in a Slower Growth environment then the market is spooked for all the obvious reasons but today on a microcosm you have oil pop from 1 00 about 2 and then yields rally so youre watching the equity market follow the two into the close and lets see how long it lasts. John, if i was an investor thats concerned about trade tensions and the uncertainty from a global Macro Economic standpoint, why are the small caps once again underperforming today . Is there an opportunity to be had in all the weakness . We feel that small caps is an opportunity to buy in the long run, during these types of market conditions, they should be insulated from the global, especially some of the domestic small caps, did global trade wars that are happening. So if you can pick a good mid sized company thats not necessarily global in nature in terms of their trading abilities then you should be able to perform pretty well anr time th really well and you cant just take a daym they will perform during these volatile markets, during the global type of volatility that we are seeing. All right well see if that plays out. John, thank you for joining us today. Thank you. More opioid news this afternoon this time of Purdue Pharma dom chu with the news. The manufacturer of oxycontin according to our colleagues over at nbc news citing sources familiar Purdue Pharma and the Sackler Family in settlement talks according to people familiar that could try to settle more than 2,000 lawsuits brought against thecompany for a total price tag of somewhere between 10 billion to 12 billion. That would involve at some point according to the sources familiar Purdue Pharma going into a bankruptcy situation to then be restructured the company to then take profits from the sales at the company to fund the trust for the benefit of this particular outcome i will say this. We reached out to the Sackler Family for a comment and we have a response back from Purdue Pharma with regard to the news of these possible settlement discussions and this is what they had to say. Quote, while Purdue Pharma is prepared to defend itself, the company has made clear that it sees little good coming from years of wasteful litigation an appeals. The people and communities affected by the crisis need help now. Purdue believes a constructive global resolution is the best path forward and working with the states attorneys general and other plaintiffs to achieve the outcome. Like i said, this is not the Sackler Family or purdue to cut one check for that they will sell units to raise some money, restructure for profits in the new company to raise some of that money and finance it through drugs and the cost of the drugs to help people with overdose situations, all of that is what goes into this an Interesting Development in light of Johnson Johnson losing in that court case in oklahoma for 572 million. Thats the story for right now well see if anything else develops after this. Thanks. Showing the quotes for j j and the smaller pharma xens that might be exposed to some of these settlements or lawsuits. Theyre lower, pretty much at the lows, endo and others. I wonder if just the idea of this large settlement from purdue putting a bigger number out there for what the industry might be on the hook for. Last week, a huge number for j j and wasnt that large. Now you have to game the numbers on the settlement. Look at the market caps. Bigger the company, the more to absorb it. Those are the names to play and stay in. Teva down 55 year to date. Its true a lot of them not great position before this. Certainly i think thats a key point you made j j rallying 2 today. A smaller than expected payout in terms of this loss we saw, court loss we saw yesterday and does it speak to the fact that j j is big, diversified and other businesses and makes up for the losses exactly j j has been dealt with head wind after head wind in this marketplace and theres a ton of reasons why j j should nt be bought and yet the market is up because its all about positioning and where people are on the side of the boat. They were all totally negative on j j and thats why the stock is up. Steve, thanks talk again soon. Still ahead, snap taking a skid today adds facebook tests out a messaging app. Plus an exclusive interview with honeywell ceo find out what he said about Recession Risks in america and the globe. Heading to break, heres a check on the data tracker. August Consumer Confidence coming in ahead of estimates with a reading of 135. 1 and down fractionally from julys reading and home prices rose in june that was slightly below the 3. 3 pace in may. Stick around ging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. When i see obstacles, i create opportunities. soft music when i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Welcome back to the closing bell. We have got 41 minutes left of trade. Taking a look at markets right now. Back to the flat line with the dow down just about. 3 right now. The nasdaq 100 actually turning positive, as well. Lets send it over to mike, though, for todays market dashboard. Thanks very much. Laying off some risk shifting risk around the portfolio. Tails, you lose. Lowering the vig the cost of making a bet coming down for stocks arguably and then the long con. Something about a confidence game there so laying off some risk. We have been talking a ton about the interplay of stocks versus bonds, the performance of bonds has been excellent relative to stocks but we have two looks at this total return of the total bond market etf, the ag against the s p 500. This is just month you have a widespread between the total return including interest in dividends. That in theory toward the end of a month to cause rebalancing of balanced accounts out of bonds and into stocks if they want to get the weightings back to the normal 1year basis no that the often when the stock market remains pretty much in bull mode for this outperformance by the bond market almost a 10 total return for a relatively conservative Investment Grade return. If were pricing in some bad economic outcome, that makes sense, but if not arguably it could turn into a tail wind for equities. Before a comment of steve on this chart, mike, talk to me about your theme here with your charts today. It is about bets, gambling, confidence games things like that. Okay. Just taking a flier on an opportunity to turn a buck i guess. No reflection of people in this building not at all. I must say i have a terrible poker face and not good at the gambling steve, what did you think of that chart given yields dropping to record lows right now what i think is the most interesting about that is when you look at what should be going on month end whenever there is an implied equity for sale it doesnt happen the way it used to happen what usually happens now is they leg into that position so they do it not on the last day of the month but maybe the last two weeks of the month we are already there people rehedged and rejiggered the portfolios so dont expect there to be a large portion to trigger at the end of the month to buy equities and doesnt happen to the counter of it. What are you looking for in september then september is going to you have to remember, we are in the last week of the summer now but most people dont get back to real work until the second week of september because we have the shortened week next week everyone will sit there and start looking at the fed again everyones going to start to digest trade headlines again but at a certain point people paid to make money and put money to work you have to be invested in this market, in this economy and you start to see money coming back to work probably late september. Coming up, shares of roku up 350 this year and a firm says this is a perfect time to buy. We have the word on the street on that call next. Plus, well discuss the Philip Morris altria deal. Plus, as we head to break, heres a check on how commodities are trading today. Oil getting a lift after four days in the red. Silver a big winner. vo the ant mindlessly marches on. Carrying up to 50 times its body weight. It never questions the tasks at hand. But this year, theres a more thrilling path to follow. father kids. Change of plans vo defy the laws of human nature. At the summer of audi sales event get exceptional offers now oh, wow. You two are going to have such a great trip. Thanks to you, we will. This is why voya helps reach todays goals. All while helping you to and through retirement. Can you help with these . Were more of the plan, invest and protect kind of help. Voya. Helping you to and through retirement. Welcome back to closing bell. Time for the word on the street. William blair out with a note on roku saying its user growth tracking ahead of netflix when at parallel stages of the growth and will have over 80 million active accounts by the end of 2025 and roku has 30 million active accounts as of q2 thats a pretty bold call considering i dont know how far you have to go to say when netflix at this stage of the infancy but it was a long time ago. Its pretty incredible to see roku run up in general its been considered now such a big play on all of the streaming and cord cutting suntrust raising the price target for chipotle. That firm is bullish on the companys carne asada product and contributing to check and traffic growth shares up almost 2 . Wedbush securities adding zynga to the best ideas list driving significant upside and maintaini maintaining the 9 price target. They say buy and been something of a turn around story and a tu