Today after forecasting a 6 to 12 drop in earnings in fiscal 2017. The question is how much of a warning sign is it for other retailers and what is it telling us about the economy . Thats not the only story today. Its not just about equities. Take a look at the tenyear yield. The beige book came out an hour ago and the markets really didnt like it in terms of the growth stories, so were back below 2 on the tenyear. The dollar index is now at a sevenweek low. The euro has moved to a sevenweek high against the dollar itself. Gold is now back above its 200day moving average for the First Time Since may with an almost 2 move higher today. One of the countrys largest mortgage lenders wells fargo reporting its results. Were going to get the cfos take on the housing market. John strewsberry coming up. Netflix will be reporting earnings after the bell tonight. Well tell you the number to watch for in that release, coming up later on closing bell. Courtney reagan, what more have we learned . Walmart told analysts its lowering its Sales Guidance flat due to currency impacts for 2017. The investments in wages, ecommerce, supply chain, they really kick up. Earnings per share between 6 and 12 in the year prior. Whats surprising is the clarification that it will account for 75 of the eps reduction in fiscal 2017. Ceo Doug Mcmillan giving somewhat of a mea culpa for confusion. Take a listen. Many might not have done the math or understood how to do the math. May we didnt give you information to do the math, but together with the starting wage rate changes to nine and ten and the other investments that we called out, it was clear that was a big number. Flat from 2017. By 2019, earnings will again be at current levels. Charles holly expects walmart will see sales grow over the next three years while generating 80 billion in cash. And buying back 20 billion in stock. There was a lot there to digest. Pretty surprising to say the least. Did catch the market by surprise. For more, paul trussel. Youve got the wage pressure, the dollar pressure, pressure from online trade. Is this something that we should that you are wringing your hands over, or just the cost of doing business . Its very much the cost of doing business. We cant take for granted that this is coming from walmart, the biggest brickandmortar retailer out there. I think that all other retailers have to watch what walmart does very closely. I dont have the opinion that by walmart making these investments in labor, is anything other than catchup, frankly. Im not certain that they will be able to translate these investments in price, labor supply, ecommerce, everything that courtney mentioned into actual mean iingful sales gains. There seem to be two separate things going on here. One is the wage pressure. You can understand how to evaluate that in one sense. Perhaps its a positive sign for the economy and something all retail has to deal with and thats fine. The other is ecommerce. How realistic is it that everybody with an amazon account today is ultimately going to want to look to order their merchandise down the road from walmart. Com . I agree with you. There are some great retailers out there that have already been making a number of investments on their own right. Amazon obviously is the elephant online. But even in the brickandmortar space, whether its a kroger, whether its costco or the dollar stores, these guys have already, you know, attracted market share from walmart because of their convenience, because of their expanded assortment. And walmart really is now trying to fight and get that share back. And so we commend walmart on everything that they are announcing their willingness but even its down 3 today, which tells you its not just about a walmart specific story. This is now something i think i saw cabellas down 3 as well. Anybody whos not amazon right now is seeing their shares, concerned about what the future really is. We already have experienced all yearlong an environment in which sales have been a little bit lighter than what they would have hoped given the perceived health of the come. Now were at a point in time where between amazon or walmart, you have an inability to expand margins. You cant take prices up. You have to invest in labor. You have to invest in ecommerce. That is why youre seeing the very broad contraction in retail today. Its not lost on anybody. Kelly a little while ago on twitter showed the crisscross as amazon now exceeds walmart in terms of market capitalization. So you are seeing this sort of transition now from brickandmortar to online commerce right now. You are. But there is a lot to kind of go into that conversation when you compare amazon to walmart. Remember, investors treat those two very differently. Amazon can sort of not make any money, and investors reward it. Walmart does the same thing. And the stock goes the other way. So there certainly is a shift, but amazon in some sense is still that growth company. Walmart hasnt been able to grow like it would. So its sort of playing that catchup game like paul has sunlighted. If amazon were to suddenly go the opposite way and build out a network of 3,400 stores, i think they would have a little bit more trouble as well. Thank you both. Meanwhile, the dow is down 164. The ten year below 2 . A lot to get to. Ron weiner from rdm financial groups. So is ben willis from princeton securities. The beige book came out at 2 00 eastern and that was the second leg lower. Was there something in there that the market really didnt like . Sort of beige kind of report. Exactly. It was a beige report. I think the takeaway was that theres still if the fomc cannot get off the schnide and raise rates, theyre not going to get any impetus from the beige book. I think the view of the overall market is that were once again in nowhere land. We have no direction from leadership at the central bank of the United States of america. And when theres uncertainty, theres sellers. Look at the dollar index. Its down almost a full point today. Strong dollar being a big headwind. We heard it yesterday. Some of these other big companies. A little bit of relief there possibly coming . I think the markets fairly valued. I dont know what people expect out of this market. If were somewhere 15 to 18 times earnings, things are slow. Nothings moving all that fast. You cant expect much. But you certainly cant expect the headwind for multinationals bringing their money back because of the dollar. We dont expect that much, so its a stock pickers market. You have to decide whether its amazon or walmart. Whats working . Maybe you take a look. This is not just buy an index and hold on. Youre hearing a similar theme here of squeezed margins. A slowdown overseas. Wage pressures. All kinds of the same things that are affecting a lot of the different sectors right now. Going into this quarter, a lot of the leading indicators are growing. We are looking at growth momentum slowing in the current quarter. We have to look at this for the next quarter. If we take a step back and look at the broader cyclical and secular picture, the u. S. Economy is still very much on track. The u. S. Economy is still the strongest area in the world. To your point, a lot of the weakness is coming from overseas. But those domestically focused companies, those are focused towards the stronger areas. And consumption over the next year will do quite well. What do you do with fixed income . That trade that everybody was positioning for for higher rates is just not working. And a lot of people are sort of caught wondering which way theyre supposed to move next. Yeah. Looking at the fixed income market for the very short term, it is an area of safety. But if we take a step back again and look at this from a secular perspective, bonds are almost the most expensive theyve ever been in history. In real terms, if you were to buy a tenyear bond today, you basically earn zero the next ten years. They probably said that a few years ago too and look where we are. In this current quarter, the u. S. Is going to face wicked growth momentum. If you look at manufacturing the last two months, you see it pointing lower. The tenyear is where it should be. If we take a look in six months, the u. S. Economy does look like it will strengthen. Ill take a different part of that trade. Weve been laddering bonds. Weve been living in the triple b space, so its hewlettpackard, its goldman sac sachs. Things we think arent going out of business in five years. We dont want a bond maturing today. Meanwhile, were still out far. Bonds are i dont think for trading. I think too many people look at bonds as do we buy them . Do we sell them . Bonds are for income. Bonds are for safety. Bonds are for stabilized portfolios. Just laddering them, if the Interest Rates go up fast, you wish you were up shorter. And vice versa. No big deal. I saw you nodding. Let me ask you as you head toward the close. Any kind of levels youre watching . Are we doing damage to the downside . Im watching walmart. I think its a great example. Its a great example of etf related selling. For that matter, so many explained the logic behind amazon. That tells you the market is misplaced. You cant be that surprised. The point is if youre an investor, thats what you need to look at. When youre a trader, youll trade against that flow. A real significant business that allows people i ordered something on amazon sunday night on prime, got it monday night. Isnt that great . And how much did they make . The point is, amazon has become a distribution network, not a retailer. They cant be priced and looked at as a retailer. But thats the retail landscape today. But you also want a company that makes a profit. They reinvest that cash in the business. Its what its become. The guy who sells the entree for 15 that costs him 20, how do you make money . At the end of the day, its not profitable. Theres no reason to own that company. Bill miller seems to own that stock a lot. Why do i feel like im seeing boomer versus millennial on this issue . Im probably the last person to sign up for amazon prime. They totally got me hooked. Thats the funnel that bill jordans talking about. 45 minutes to go here. The dow is down 154 points. Walmart the biggest drag on that index. The broad index, though, the s p 500 also giving up half a percent today, while the nasdaq is doing a little bit better. Its down ten. Netflix posting earnings less than an hour from now. Well tell you the one number to watch in that release. Thats coming up. First, though, wells fargo cfo talking earnings in a first on cnbc interview. Find out how wells plans to breathe new life into sluggish Revenue Growth. That is next. [announcer] sundays your last chance to save big during sleep trains triple choice sale. For a limited time, you can choose up to 48 months interestfree financing on a huge selection of tempurpedic models. Or choose to save 300 on beautyrest and posturepedic mattress sets. You can even choose 300 in free gifts with sleep trains most popular Stearns Foster mattresses. The triple choice sale ends sunday at sleep train. Sleep train your ticket to a better nights sleep 45 minutes left in the trading session. A down day. Walmart warning on earnings and sales down the road. And the beige book came out and didnt impress anybody with t r their assessment of the economy. The s p down ten. The nasdaq down 14. Jp morgan one of the bigger drags on the day after missing earnings estimates on both the top and the bottom lines largely because of what they called a weak trading environment in the Third Quarter. Shares also moving lower today, despite reporting better than expected quarterly profit in revenue. Investors just are concerned about the banks declining Net Interest Income and exposure to the Energy Industry and loans there. We welcome back once again as we dig deeper into the report, wells fargos chief Financial Officer john shrewsberry. Good to see you again. Westbound. Thanks for having me. Its good to be here. Whats your message on the Third Quarter . What was the feature for you . Feature for us was great performance with no drama. We grew revenue, both Interest Income and nonInterest Income. Our expenses were down. Our credit was in line. We hit our metrics with roe. Roa is the best in class. About 130 basis points. We turned a lot of capital to investors. So were very happy with the outcome in the Third Quarter. John, what about we were just talk about other businesses. But profit margins. Especially relative to some other banks that were weaker there. What were the particular reasons for you . Our Net Interest Margin was flat quarter over quarter. It leads any other bank in our category by a long shot. Its different these days because we carry so much extra cash. Its not a metric that we manage toward. Were more interested in producing dollars. Weve managed to grow that period after period. Its a little bit of an archean metric at a time when structurally banking Balance Sheets are different. You guys have maintained you actually added reserves probably because of delinquencies of energy loans right now. Whats your assessment of the industry . Is it just a cycle thing . Or is this boom that we saw up in the northern part of the country with the fracking boom that was going on . Whats going on there . Sure. So its a big business for wells fargo, but the loan outstanding amount is about 2 of our portfolio. In this quarter, we did provide for more allowance against that part of our portfolio. Because things are definitely crude prices have stayed lower for longer. Its a cyclical business. Im not sure how long this leg of the cycle occurs. Or maintains itself. Weve been pretty clear with investors that were prepared for it and were working on it. Providing for the exposure. Fra theres bottom a lot of customer activity happening in this space as people take advantage of m a activity and restructure their Balance Sheet. As long as prices remain around where they are or go lower, you expect this trend to continue . Is that what youre saying . I do for sure. It will have a big impact on wells fargo. About 2 of our loans are in energy versus 30 for mortgages. So our credit outcomes arent really driven by energy. Producers, mid stream companies, Services Companies to continue to experience the pain of lower crude prices. One thing i cant quite wrap my head around is looking at the loan growth that you and others have experienced, which is quite strong and expanding in the double digits in some cases for the u. S. Consumer. Meanwhile, this morning we got kind of a disappointing retail sales number. The beige book was a little bit more downbeat. And walmart, of course, has its struggle. So that dichotomy, i cant quite understand. How would you describe the strength of the u. S. Consumer, the increase in loans that youre seeing and that sustainability . Well, the increase in loans, its broadbased in our commercial businesses as well as consumer. The bigger growth is on the commercial side of things. So on the consumer side, we see growth in mortgages, and on the Balance Sheet in particular, its prime jumbo mortgages, so they tend to be more affluent people. We see increasing credit card receivables. People are using their credit cards. And in autos. Weve had a really strong year in autos. So all of us have seen balances move up somewhat. Its grown faster on the commercial side than it has on the consumer side. I guess in that sense, explain some of the pockets. Just a question as well backing out to the Net Interest Margins, but your business period. We have inflation break evens moving down significantly. And people talking even at the fed about waiting on rate hikes. It could be years before we get a rate hike at this point. What would that mean for your business . Well, weve been talking to investors for a few quarters about expecting a longer scenario, both at the short end and longer end of the curve and positioning ourselves for that. We definitely make more money, but the results weve generated in a zero Interest Rate environment for several years now have been record results for wells fargo, because we benefit from having a 1. 2 trillion deposit base that has an average cost of about eight basis points to it. While loans generate modest returns, weve managed to produce industry leading results. So far so good. All right, john, good to see you again. Cfo of wells fargo. 38 minutes left in the trading session with the dow were back to the lows of the session now. Down 185 points on the industrial average. Netflix announcing its earnings less than an hour from now. Well tell you what wall street is expecting next. Also, kool the gang. Yes, kool the gang will be here at the New York Stock Exchange. The grammy winning funk band celebrating 50 years in the industry. The four original members of the band will be here. Well talk Game Changers and where they see the Music Industry heading as well. Maybe well get kelly to dance or something. I dont know. Coming up. Were going to get bill to dance. Hi watson. Annabelle, your birthday is tomorrow. Im turning seven. What did you ask for . A princess. And a pony. You like things that begin with p. I like pink frosting too. Will you have a cake . Yeah. I was too sick to have one last year. The data your doctor shared shows you are healthy. Are you a doctor . No. I help doctors identify cancer treatments. I want to be a doctor someday. I can help with that too. Watson, i like you. Ahh. Steve, other than making me move stuff, ces. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that 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 . For all the confidence you need. Td ameritrade. You got this. A lot of talk about walmart today. Take a look at boeing as well. That stock selling off after Delta Management made comments on its call today about the supply demand die unanimous is for boeings 777s. Heres a look at netflix, it gets set to record its earnings after the bell today. Julia boorstin joins us now with a preview. The number one thing in f