Transcripts For CNBC Closing Bell 20160817

Health of retail looks like. Tough to get handle on retail these days. So diverse. Plus after a recent rash of airline glitches, there are new calls from congress for airlines to overhaul their i. T. Systems. We will talk to that man there, senator Richard Blumenthal, one of those lawmakers behind the initiative. He and senator marky from massachusetts sent a letter today to those airlines seeking answers to the latest glitches here. And reporting earnings after closing today, tech giant getting toward layoff 14,000 employees, nearly 20 of its work force. Shares down about 1 on the news with those earnings coming up. Over that over the next couple of hours. Lets get to fed minutes and markets reaction in a minute. First a closer look at todays earnings mess in retail. Courtney reagan has the low down for us. Plus some recap of the special guests you had last hour. Courtney . Hi, bill. Remember last week we talked about retail resurgence, but i said, whoa, not so fast . Today targets traffic is the lowest its seen in a year and half. Comp sales hit pretty hard. Target posting first comp decline in eight quarters. Now earnings lead by a wide margin but thats largely because of cost cuts so target went ahead and cut its comp forecast for both the Third Quarter and Fourth Quarter and lowered its earn willings range for the full year. Now transition to cbs with the pharmacy as part of the traffic disruption because they have to reenroll with the new pharmacy. That is a bit of an issue. Electronics is very weak. Down double digits. Target saying apple products are responsible for about a third of that decline. Perhaps target is a little overindexed to apple. But thats a conversation for another day. Food deceleration was a bit of a problem. Remember grocery is an area where target is trying to ramp up efforts. But target says it will have to revisit that plan in the second half of the year. Not a lot of details on what that exactly means. Targets new kids line was injected very well. But only Just Launched in july. Here at jc penney analyst meeting, the company laid outity threeyear financial plan. Although i think that the market is having a little bit of trouble believing that it can make it happen. Comp sales between 3 and 4 by the year 2019 seem a little bit hard to believe at least for the market right now. Jc penney shares down about 3. 69 . Big trouble again is traffic. Can the traffic get there for jc penney to hit those comps . I sat down exclusively with marvin elson after he spoke to analyst and here is what he said about jc penneys ability to meet those marks. We take the whole value message. Its really important to our customer. We struggled years ago understanding who our customer was, what she wanted and how we could serve her and we think that this leads us in a much better, clear direction. Our stock is up for the year and we think we are headed in the right direction. Appliances are a big part of jc penney and marvin ellisons plan Going Forward web said the areas in the store where the appliance shop exists productivity is ten times what it was with the old merchandise in that location. But of course the big question is, how many refrigerators do you really need . When that shopper comes in, many of which are new shoppers to buy a refrigerator, can you also get them to come back to buy jewelry, shoes and makeup at sephora. Thanks. Maybe that New Washington machine shopper is coming from somewhere. They have to. Isnt the problem just as macys highlighted last week, we are overretailed. There has to be more cut backs, dont i think, in supply and retailers continue to grow here. Isnt that what is going on . Well, whats so interesting about that is we asked marvin l ellison directly. When that happens in malls where you exist, what does that mean for you . And ellison says that is a positive. They look at store portfolio. They only are closing about seven stores right now so ellison thinks he picks up on some of that as well as from the sears traffic, especially with the new appliances. He is right or wrong . Thats for the market to decide. But right now thats where ellisons stance is on the stores. All right, courtney. Thanks very much. Courtney reagan joining us today. Fun fact, by the way. First thing i ever, ever bought online. Retail more than 20 years ago was from jc penney. You remember that well . I bought dishes. It was a big deal. We bought something, and it showed up at our doorstep. What a concept. Now to the fed minutes and knee jerk reaction where the dow is up five point. It was down double digits. Now joining us John Ka Nelly from lpl financial. Steven gillford from Stewart Frank el. And cnbcs very own Rick Santelli checks in from chicago. Sarge, i mean, look, we dont learn a whole lot new from the fed minutes but markets seem to take a little comfort from it here. The markets coming back into positive territory for the most part. Yeah. I mean, they bought utilities and the odds of a rate increase actually dicreasing from september to 26 to 18 this afternoon. And for this year say december from 53 to 45 this afternoon. So maybe James Bullard hanging on to his dovish stance. Maybe fed minutes. But people are seeing less of a chance for september high right now than this morning. I want to go into what the Playing Field looks to me. Core retail sales. Housing starts crack the 1. 2 resistance level. Core cpi. Even the fed is posting 1. 46 head cpi Going Forward which is up. 6 from where it is now. Basically everything plays into in my opinion, the need for a rate hike sooner rather than later. I understand they take a pass in september. Now rick, the interesting thing is i guess yesterday and repeatedly over the weeks suggested that the fed wont raise rates in september because of the election that looms just beyond. Do you think thats right . I do think there is lots of politics involved in the Federal Reserve unlike the boiler plate many have. But i think if there is no election, i still think i would be hard pressed to say that i truly believe that tightening was coming. Im not sure what the fed wants to do but i know that if they look to the marketplace, if they look to the iron year, fed fund futures as validation for their actions, those markets respond to them when you think about it, it is a crazy echo chamber. It makes little sense. And i remember when i first started trading, there was a guy named paul volcker. Thats the loader. You put a large group of people in a room, they are always going to disagree. You need strong leadership. I dont see it at this fed. And you know, the last guest is right. But it is way more than that. We are still virtually at emergency rates. Its crazy. Theyve had many opportunities. Im not sure whats going on but i know one thing in the who is saying it best, meet the new boss and it is a lot different than the old boss and it is called the market. And the mark set never going to say, okay, were ready for a rate hike now. John, what do you think the mark set going to let me just preface it this way. He wants to see more positive news on the economy before they pull the trigger. Whatever that is. I mean, so what do you think the fed is waiting for . And what will happen to the market when they do finally pull that trigger, do you think . I think it is still data dependent. I dont think that changed. There is still a lot of disconnect between the fed and market. A lot less than the start of the year. If you remember at the start of the year the fed says they will do hikes. Then in march just two. So that has narrowed somewhat. What we have seen lately is a lot of disconnect within the fed itself. Todays minutes look like, you know, the family table at thanksgiving. They are all arguing with each other back and forth so i think even the fed doesnt know. We have one fed rate hike baked in this year. Very narrow path it a september hike. We are now off the path given from last week but we still think we get one in there and maybe two next year. But and i think the fed is also really overly concerned as most as ive seen in the 30 years ive been doing this, with the external situation and in particular the dollar. I think thats the key. Well, in a way the dollar keeps becoming more of a problem for them as the globalization continues and more of the Global Economy is using it. But i will go back to your tech thesis, john, as people say, all right, we are looking around in the market. You still like tech here, is that right . Yeah. Tech is our favorite sector. We got through the earning season. That looked pretty good. A lot of underspent in tech lately. Tech does provide growth and provides a little bit of yield where it doesnt back in the day. So tech is our favorite sector. We also like health care. Health care has come under already this year a lot of political pressure by think to the large extent those are overdone so health care is another, you know, another area we favor here between now and the enof the year. Sarge, where are you seeing fun flows go right now . Are we are people still inclined to want to buy the issues like those utilities and the telecoms or are they starting to dip their you know, bank of america is high on oil stocks all of a sudden. You know, i had felt that oil would be a good buy if we could get the commodity down into the mid 30s, which now is running way from that level. You wont see that. And like that last guest, john, i do like the tech sector. The one area where i still have several longs. I am trimming my profits in some areas. Getting out of some of the industrial names. But Going Forward, im going to have a lot less position so i can concentrate on exactly what im doing. Im going to be still diversified but im going to have a lot less on the plate because i think were at a point right now where if youre wrong, you could be very wrong. Sewer going to have to defend yourself. Works in investing, works in life. A lot less on that plate. Real quick before we go, keeping an eye on the dollar again here, and is that going to be part of the tell for the fed and for the markets overall . My opinion is no. Because i think the dollar and all of the investors and speculators traded off fed comments. So i really dont think it is going to be a good signal. However, i will say that when you really dont have to question what the dollar is doing because it is either super strong or super weak, then i think maybe you have reached the turning point. But i think fed fund futures, forget about it. Its a different time. A new normal. There are rules of the road. People used to be able to traders looked at all of the fundamentals and made value, educated judgments and put their money to work in fed funds. You cant do that any more. Look at a couple of ticks in fed fund and think those percentages mean something is silly. All right. Got to go. Thanks, everybody. Thanks, guys. Thank you. Got a little more than 45 minute still to go in the session here. Digesting fed minutes. Digesting some of the other developments of the day. Dow is down four point amid all that. An lot of calories to digest. The s p is a fraction lower and the nasdaq is down 8. Gaining at least 50 so far this year, plus two stock pickers talk about names that could notch fat gains going into 2017. And up next, remember deltas travel nightmare last week . Senator Richard Blumenthal says it is high time air carriers overhaul their Technology Systems to help passengers get to where they need to go. He will tell us exactly what he is looking for in just a moment. Keep it here. 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Create missed street estimates for earnings last quarter and kbaf weak guidance for the current quarter. Meanwhile, Valeant Pharmaceuticals up. Upgraded from equal rate and raising its price target from 33 and is now at 29 and change. Firm says that major risks for valeant is in the stock already and it suspect the company to successfully renegotiate. They are just overweight on very controversial name. Senators blumenthal and marky are cracking down on airlines sending letters to 13 Major Airlines including delta and southwest. This after deltas widespread computer outage resulted in thousands of Flight Cancellations and delays. The senators are asking airlines to explain outages to reimbursement policies. Senator blumenthal joins us from his home state of connecticut. Welcome, senator. Thank you very much. Great to be with us. Is the heart of this that you want people to swap on to a Different Airline to get where they are going if one of the major carriers runs into a problem . If they run into this massive melt down and travellers are to be reimbursed and rebunded, no questions asked. For given the opportunity to rebook on that airline or another airline without any limit on time or additional cost. And they will be able to do it at their convenience, not the airlines because these massive melt downs have become increasingly frequent. And they happen senator after major mergers occurred in the industry. American and us airways, northwest and delta and of course united and couldnt yent nal and we found especially with unite end continental, difficulty of merging their reservation systems. Do you think thats part of what is going on here . Just trying to get their acts together . Thats a key point. Consolidation in the industry is now produced a market power among four airlines. They control 8 will 5 of the market and they had to consolidate their systems. So they are relying on software and other parts of their system that is out moded and they have had to cobble together systems. And im asking that they invest to make the systems more resilient and reliant. Remember, delta failure resulted from a piece of equipment, switch gear malfunctioning, so that backup system failed in effect and that kind of elemental failure simply should not be occurring if they invest properly in these systems. Yeah, i guess im just wondering what the role is for the government to play here. Seems like thats in the companys interest already to do these investments so they dont have the catastrophic failures. I can see a role to force or nudge them to effectively bail one another out. Just have one say to the other, you know, were willing to take these passengers and try to get them where they need to go but that seems also like an extraordinarily complex maneuver. Hard enough to get rebooked by the same airline let alone pick from a suite of flights from all the different carriers available at an airport. So yeah, is that the idea here . Is there any cost benefit analysis that would go into, you know, any decree here . The idea that the free market should provide an incentive is absolutely right. But we dont have a really free market when four Companies Control 8 will 5 of the market and their systems have resulted from the cobbling together or integrating or failure to integrate their computers. So lets create some incentive and require them or maybe they will voluntarily agree to refund, no questions asked or rebook without limits on time and without additional charges on their own airline. Or competitors. Or a competing mode of transportation. That would make the market work more efficiently and give them incentives to do the right thing and i hope they will do the right thing. It is interesting, the conversation we have here, occurs to me the idea behind the deregulation so many years ago was to promote competition and i know the airlines themselves would cite problems they had after 9 11 and certainly after the financial crisis. That is maybe what promoted all these mergers we saw. But now we find ourselves with those four airlines that you talk about, was it a good idea to allow those mergers to happen . I mean, is that really a problem we should look into as well . Great point. The mergers probably should not have been permitted. I opposed one or more of them and i believe strongly that the industry aught to be examined. I urge the department of justice to conduct an investigation of some of the potential, emphasize potential, collusion thats occurring. The so call talk about design capacity when they come together and talk to each other. So the department of justice now is investigating and perhaps that will he energized competition. But your question is absolutely right. Should it have been permitted . Probably not. But now lets make the system work better and maybe some form of incentive required by the government in rebooking flights or refunding without questions asked is a way to give the industry that energy and em pe tus to do the right thing. They should be doing the right thing by their customers and the charges that we have seen, baggage fees, cancellation fees, food fees, and the fees to sit with your children. The cancellation fees alone are 3 billion a year. So lets put maybe some of the cancellation fees back into enabling the customers to get relief when the flights are cancelled. All right. Senator blumenthal, thanks for joining us. Thank you, senator. Thank you. Senator blumenthal of connecticut. We have 37 minutes left in the trading system. The dow is up about 4 point. S p up a point. Nasdaq still trailing down 6. When we come back, live to rio where our colleague has new comments from ryan lochtes attorney. The olympic swimmer has been ordered bay judge not to leave brazil in an alleged robbery case but thats water under the bridge because he is already back in the u. S. We have the latest developments coming up. And reporting earnings, this on the heels of ciscos massive job cuts. We will break it down as soon as they hit the tape. Stay with us. Announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Which adds fuel to my bottom line. Whats in your wallet . Hello prashant bhuyan. Cofounder of the Fintech Services startup. Hello watson. Your analysis of social media and conversations on various trading floors, helps us uncover insights. Insights that help investors predict market closes, well before markets close. You know, your analysis has helped us improve our predictive accuracy by over 500 . 550. 2, to be precise, but we can always do better. I like your attitude watson. Now that story played into the worst fears of security in rio and raised questions about the safety of athletes and tourists now a judge saying she found inconsist eni says between lochte and his teammate jimmy fagans accounting of events. Ordered their passports seized and to remain in the country. Eoc said the judge went to the Olympic Village but swim team moved following competition. Lochte is back in the United States according to his lawyer and his lawyer is fighting back in a phone interview with nbc news insisting that lochte told the truth and cooperated fully. When there are International Headlines about what happened to one of americas greatest athletes while there, they have to save face and thats what they are doing now, he said. Before leaving rio, lochte said he didnt immediately tell eoc that morning for fear of he and teammates not following security protocol but lot of questions about what truly happened. This is not the headline the swim team or olympics wanted. They dominated in the games here pl. We will bring you more. And i should mention there is a videotape going around cited by the judge today. Security video showing lochte and his teammates coming back at some 3 00 in the morning into the athletic Olympic Village there and they are joking around with each other. It does not look like they had just suffered ive just been told we will reserve judgment for now but quite a while story captivating people here. Im curious, have you seen the video . Has anyone snels else seen the video . I have seen the video. It is floating around the interview. The judge talks about it in several instances and says thats one of the reasons they wanted to continue the investigation here in rio. Of course without him here, without lochte here, who knows where it will all go. We have no word yet on where jimmy fagan is. I should note one thing. A lot of athletes leave before the olympics is over. This is not unusual. A number of them have already gone home. Folks who competed in the first week, for example. I was just reading on the wires, jimmy fagan was requested an interview by reporters in texas, and he declined. He is still in rio. They cant find cab drivers or witnesses as discussed there are a lot of contradictions, arent there . It is a very strange case. What happened on sunday morning, his mother was quoted talking about this incident and just about an hour or two later, one of the officials from the olympics said it doesnt happen. Claiming that he said, lochte said it didnt happen. Then the story turned around again and lochte said it did happen. He went on the today show on monday with billy bush, explained what he said happened and now here we are with allegations that maybe the truth is not the truth. But we dont know at this moment. Bizarre. Thanks, andrew. You didnt know you would have a real story to work on when you got down there. Who knew . The crime beat. Exactly. Thank you. Lets goet to sue. We begin in california where the wildfire burning in San Bernardino is now nearly 47 square miles. About 34,000 homes and some 82,000 people are under evacuation warnings. The fire began late yesterday morning. Police believe a previous arson suspect may be to blame. Meanwhile some areas of louisiana are beginning to assess damage from some of the worst flooding in that states history. As many as 40,000 homes were damaged. 11 people were killed. Close to 70,000 people looking for help from fema and more flooding could be to come. Delta air lines is introducing what it calls the worlds first all suite business class. Private pods will be aboard some delta flights with a flying time of 12 hours or more. Each featurees a sliding door for privacy. You can see them in the fall of next year. And a summer light show in japan. A thousand women dressed in kimonos danced with lanterns on their heads. The dance originates by ancient folklore and is about an ancient warrior being lost in the fog and buying being found by light. Heading into the last half hour of trade, the dow now up 13 point. A leading trader will tell us what he is watching into the close, coming up next. And quick correction. We were saying a few minutes go that cisco announced job cuts this morning, the company hasnt yet. A report they will announce the job cuts. Well see if cisco confirms anything. They will report earnings after the bell. We will have instant analysis of those numbers coming up. Tokyostyle ramen noodles. 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I dont see any movement in september. Im looking at december. Meanwhile, looking to walmarts earnings already. Think thats a good read . Yeah, it is a good read. Consumer spending is one thing but walmart you get a real pitch. A hundred million shoppers a week go to walmart. You get a real shot at what is going on. That comes out tomorrow. Thats interesting. All right. Looking forward to it. Thank you very much. Alan valdes. Bill . All right, the dow up 18 point. Climbing ever higher here. Several stocks have scored big gains of 50 or better year to date. They are names that you know but maybe not stocks you would choose. So up next, we will look at top movers and then offer some other names that you should keep an eye on as well. And still ahead, bailing of the Major Health Insurers on obama care insurers have the president s Landmark Health plan may be on life support. Leading Health Insurance expert sizes up the future. Still to come on closing bell. This is my new alert system for whenever anything happens in the market. Kids a natural. But thinkorswim already lets you create custom alerts for all the things that are important to you. Shhh. Alerts on anything at all . Not only that, you can act on that opportunity with just one tap right from the alert. Wow, i guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. Welcome back. Barnes noble is tumbling, down nearly 11 . The bookstore chain ron bar saying he wasnt good fit. Ridgeo will serve as temporary ceo while the search once again takes place. Meantime stocks like dicky Sporting Good may not have been in your portfolio lately but maybe it should. Offering up other names to consider, seema . Kelly, unrecognizable or rather unexpected names with gains year to date. You were just mentioning some of them. Improving earnings and ongoing restructuring and dick Sporting Goods up a similar amount and bankruptcy rival sports authority, groupon making a come back in 2016 on improving user metrics. But as a group energy is a big winner, impressive gains for u. S. Steel and Southern Energy helping recover commodity price answers major costcutting initiatives. Other part of the market posting big price increases are the gold miners. Fuelled by the resurgeance in gold and rates, building up over 120 . Higher by 75 so far this year. But Going Forward, oppenheimer Strategy Team which has a price target of 2300 on the s p 500 sees not energy but materials leading the market higher from here until the end of the year. Benefiting from the stabilization and energy prices, grass per yield and mna, including monsanto, and praxair and eco lab, supplier to restaurants and bars and a bet on u. S. Consumers, names to keep an eye on potentially. Kelly . Yes, seema, thank you. What other stocks can soar over the next year . Welcome to you both. David, who do you think can rise 50 here . Yeah, tell us, david. Here is the recipe for trying to find these companies. Number one, is there mistrust or doubtfulness in investor sentiment. Second is the companys fundamentals improving from off the bottom . Is it still trading well below its high over the last couple years . And to that end i think generalcy and wyoming, smaller white rail that operate in the mid cap area has the potential to do that. There are seven buys and six holds on wall street. Still trading well below the 2015 high of 105 a share. Fundamentals are clearly improving the stock is up substantially. Off its february lows. And importantly, they are growing their Free Cash Flow and you know i like Free Cash Flow yield. This company is generating 6 Free Cash Flow yield and growing Free Cash Flow by more than 50 this year. So i think that stock has the potential to be very positive for investors. Steve, who are you im looking at your note here, you tell them, who are you picking for the gain here . Okay. So lets be clear, here when you talk about something that will have to gain 50 . You talk about a lot of risk and a company thats obviously got a lot of problems going on in order to hit the number. But thats an opportunity, you have a Biotech Sector that been beaten up bad because of political pressure and pricing. A lot of that is phasing way. Actual sector outperformed the stock and thats because people are wondering what stock will do and the company will do with their freed up cash. And they are worried about their current drugges with hiv and hepc drugs, starting to fall off profitability. You are betting on the fact that they will do something with that cash. Theyve got 25 billion give or take of cash out there and a track record of buying really Good Companies that end up being the next hiv drug or next hep c drug. So if you are looking for that lodge shot, a company like that, you are betting on that they can do something with all of that stock. Anyone else, steve, briefly, in the social media space maybe . Yeah, okay, okay. Twitter, okay. Listen thats who i yeah. And twitter, huh . I know. Twitter, okay. They cant make money. They got problems. We all know they got problems. But they are a prime takeover bid. Some company out there could take them over. They have a huge base. Everyone knows how to use it. Very popular in that sense. And if you find a company trying to get into that space you could buy them at a cheap value because they dont make any money and hopefully find way of make profit. It is a reach. A gamble. Kelly and bill, ill just say, yes. Theres always risk in trying to find a stock that can go up 50 in one year does have always an amount of risk to it. It is more you grow rich over longterm but quickly nearly 20 of the s p 500 stocks are now up 50 or better off the 502week low and breath and participation is a glorious thing for the market as breath and participation is improved i by that bodes better for the potential to find stocks especially where there is continuing mistrust and a fundamentals are improving. Very good. Weve got to go at this point. We will take a break here. Dow creeping ever higher as we head toward the close with 15 minutes left. How about buying the vix . Ceo of mahoney Asset Management is telling clie whoent may want it he experience more confidence regardless of the conditions. Get great offers at the lexus golden opportunity sales event. Get up to 5,000 customer cash on select 2016 models. Ends september 5th. See your lexus dealer. Welcome back. About 11 1 2 minutes left. Little quicker. We will see if it has any movement there. We are waiting for ciscos earnings due out at the top of the hour. Josh lipton in San Francisco has some of the expectations and maybe we will find out if they are going to announce some layoffs today, huh josh . Maybe, bill. But as for results, investors not expecting much when cisco does report. Q4 up 60 sent on revenue of 12. 6 billion. That represents a drop of about 2 on the top line. Rbcs mitch steve says to also focus on Gross Margins which need to come in close to 64 . That, he says, would indicate cisco is doing a good job at transitioning way from hardware to Software Services and security. There are also reports as you mentioned, bill, that cisco could be ready to cut 20 of its work force. Ceo chuck robins will be on cnbc to discuss reports as well as these earnings results. That is tomorrow on squawk on the street. Back to you guys. All right, thanks, josh. We will see you a little bit after the top of the hour. Joining us now on the floor of the new york stock exchange. Laura rossener and ken mahoney from mahoney Asset Management. The idea behind the release of the minutes is among the things the fed does to be more transparent but do we learn anything . Arent we more confused than ever . Sometimes thats the case. But i think we learned something today. Whats that . That the committee is approaching conditions that might warrant another rate increase. I dont agree with the bond mark eat reaction which was to say in september increase is much less likely. I think their expectations are low. The bar is low. They dont want to see much. They are just a little concerned about some of the low down and employment gains have seen and look, weve already seen a bounce back. So the conditions are already there. They just need to continue. As you are looking to buy volatility here . So funny. We have been so placid here. Like the dog days of summer. And this report doesnt help things either. And the vick comes down after the report. And when things go in cycles. The ocean is calm. Then a storm comes. We like to buy the xx here on the vix is low, complacent. We dont know what is next. We think it will pick up though. We think it is a good hedge for clieent to have is that vtf . It is vtf, sorry. It is a sister to the vix. We dont know the market direction sometimes. But when we go with these periods of times, we know something is on the other side. Whether it is an international problems. Or going against the grain. We see volatility pickup. Policy action. What about jackson hole next week . It seems like if they were getting ready, to raise rates, especially in it is going to be september that she has to be pretty Crystal Clear about that, right . I think so. But on the other hand if you look back over the last year, janet yellen herself did not move market that many times. She waited until after the data and the information was clear and then the cat was already out of the bag. She had nothing more to say. So she confirmed it. So i expect jackson hole to be interesting because like that yeah. But you think about it. We can with stand the quarter rate hike at this point in the cycle. Should be rooting for better economic news. And spooked out by a quarter rate hike, we should be ready to work with in case there are things to faulter and go to. I have heard that before, why should we be scare badd by a qur point rate hike. But if people are planning to head to exits, dont you think it is the beginning of a new trend here . Im not sure. It is possible. If rates are still low, thats what the mark set still saying, we are going to stick it to the upside for a reason, because there is nothing else to do with your money. I dont think we are in that situation any more. The fed demonstrated they can go once, then pause. Pause for quite some time. There is no reason to think that if they go again we should expect another hundred basis points of rate hikes. And clearly thats not what the market even thinks right now. We had some fun with the whole term dovish hike back in december. But it turns out thats kind of what has happened here and maybe it would happen again. We keep looking at you are obviously data driven and she does her research but they are new york Market Driven, havent they . They are about ready to raise rates and goes down to february and march and they come down and kick the can down the road. But the melt down was predicated on data worsening. And we are back to that time. And what is happening there and commodities coming down. But they today come back off their stance of raising rates. Which is data driven but also Market Driven and market dependent. I think Financial Market data are quite excellent data. It is realtime. It reacts to news about the underlying economy. And if you think about the stock market, gasoline prices, oil prices, it does impact things like confidence. Sure. So it is mean willingful and is in the set of indicators the fed is looking at and to determine policy. Very good. Lauren rosner, good to see you. Ken mahoney, always good to see you. Closing countdown is coming your way in yaust moment. Dramatic shakeup on the top ranks of Donald Trumps president ial campaign. We will tell you about the Secretive Hedge Fund giant who might have a hand in these moves. Youre watching cnbc first in business worldwide. Energy is a complex challenge. People want power. And power plants account for more than a third of energyrelated carbon emissions. The challenge is to capture the emissions before theyre released into the atmosphere. Exxonmobil is a leader in carbon capture. Our team is working to make this technology better, more affordable so it can reduce emissions around the world. Thats what were working on right now. Energy lives here. Wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. And if you have more than one Liberty Mutual policy, you qualify for a multipolicy discount, saving you money on your car and home coverage. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. About 3 minutes left. The dow was down i think about 6 of 0 points when they came out and slowly it came back. Came out at about 2 00, had a little stutter step. Essentially flat. 10year yield. See how it did today and what its response was to the fed minutes. What other direction yeah. And there it is now. At 156. So down 2. 156. And by the way, on time for wti u. S. Crude. Even crude oil rose and we are up to 46. 8 8 on u. S. Crude. Thats where you weigh in on the whole issue right now. Cisco is in the hot seat. All kinds of talk about a big layoff announcement. Maybe they will announce it in earnings. And l brands retailer will be out up a half percent going into the close here. So the important thing is the fed talked about the three things that matter are deflation, jobs and what the International Outlook is and on inflation made it clear. They are well short of their target. Again, caution on jobs but not been improving as much in the last quarter. So okay. Stay good but cautious, International Brexit is still very much an issue. Caution, caution, caution. What do we know . We know that janet yellen when in doubt will air with the doves. So we have a cautious report. Yes some people want it raise rates but they seem to be still in minority. So she is going to stay on the side of the doves and market you saw moving done there clearly indicating they believe that a rate hike is not going to happen. What about the argument that ken mahoney and others made as well. Would one quarter point hike kill us . Of course not. I think the fed is concerned about unfor seen consequences. I think they have such a foiled screen right now that until they are absolutely certain that there is some economic justification for raising rates they wont do anything. All right, bob, thank you very much. Going out with a modest gain of 20 points. And fourpoint gain for s p. Organization that kelly is familiar with. And ringing closing bell here today at new york stock exchange. And ringing at the nasdaq. Stay tuned for the fiscal earnings coming up on the second hour with kelly evan answers company. See you tomorrow, kel. Thank you, bill. Welcome to closing bell, everybody. Im kelly evans. Helping turn this market around, dow finishing up 19 points on wall street today. S p up 3. Nasdaq adding about two point. Investors getting set for a big pair of earnings. Josh lipton following the result for us and and more l brands results when they come out. Thank you. Well be out with you in a moment. We have cnbc commentator and mike san tolly along with carol roth. Jason from fatigue joins us along with fast money trader tim seymore. Thanks for kicking things off with us here. Mike, this turn around in the market is not necessarily a huge rally but a significant one you look at the chart, minutes come out, people are encouraged. The line is because the fed wasnt quite as hawkish as they could have been. Is that rational . I think somewhat rational. We were flenching ahead of the possibility that the minutes could be more hawkish. This is not a major move, not a major surprise. A lot of mutt el in the message of the minutes because on one hand and on the other hand it speaks to where we are in this process. A judgment call right now. If evidence is probably enough to justify the hike but it is moving sooner rather than later. Their frustration i think continues in terms of fed watching and markets are mostly pricing in this kind of response. Mostly. But i somewhat feel like we have a little puppy and youre playing that take way game and youre falling for it over and over again. Did anyone expect that they were going to come out hawkish here . Come on. The fed moved the goalpost so many times. It is not even in the stadium any longer. I certainly think with the election around the corner that we are not going to see any movement before november. And i mean, should that basically be the message that people stick with regardless of the fact this is just before the results . Listen, i think the fed had a drudgers, it would tighten. The problem is when a titan last december and talk about before tightening the market fell apart the first six weeks of the year. This is how quickly the fed can tighten is true in the beginning part of the year. Thats not as much of an issue now. But you should pay attention. Thats indicating where they want to go but i think Market Forces i agree with my esteemed colleagues here i cant see it happening. Maybe once before the end of the year. Maybe. And tim that means they are on a once a year pra jektry which is pretty extraordinary. We have talked about that before. So the dollar we are watching different classes trying to figure out what to do with all of that information and i dont know, i guess where does it leave us back at square one . And again, remember it was last september that maybe was their window and they blew it and there is a big difference between hiking cycle and just raising rates normalize. So you know, therefore, i think that they have given themselves a lot of optionality again. And the white paper that he wrote monday night into tuesday is also extraordinary. Strapping your inflation target puts a lot of downward pressure on the dollar and that is what jason is referring to. As i look at trades working and you look at both deflation trades and emerging markets and people that people thought the minute the fed came back into the market you are running for cover. I think ultimately ian will get a benefit. I think some mining stocks and resource stocks will get a benefit from some certainty on the fed or its never as certain as carol said. How about more insight into the process. Some assets will rally on a view that fed has done once or twice. I any the feds speaks was for a week and a half has injected more volatility back into the market. This is how strong the data has been lately. If you look at tracking numbers, almost 3. 5, to 4 . Is this what the mark set predicated on . I think partly. Also the earnings session we have been working through for about five quarters is also coming to an end. You have better visibility going into the second half of the year. Our chief econ mitt pointed to Industrial Production today up 7 over the year. Housing data still seems good. I think a lot of the concerns, a lot of hammering is on the start of the year. And is largely gone. Now youre in the lower for longer and people justify very high variables in the Interest Rate market. You are hearing two different narratives. On one hand you are hearing we recovered. On the other hand you hear were not sure if we recover. At the end of the day the fed policy in the short term maybe works. But over long periods of time there is no evidence that it works. And it certainly does seem like theres diminishing returns or perhaps negative consequences. I made the argument many times before that you know, Companies Get lazy and they dont invest in their capital the way that they should when you have a situation like this. But even if you think about the consumer and you think about their savings, you know, at some point they are going to actually need to save more for their retirement and what not. They wont take that money and spend it. So it is a disappointing thing, i think, for a lot of people. Although not a surprising thing. And the conversation right now around the fed is injecting more uncertainty and variability. You have to keep in mind that janet yellen is going to speak in a little over a week at jackson hole. And what has happen said they look at the market response of what was put out and they try to fine tune it. That gain cant last forever but she might actually try to have people remain focused on the possibility of december. Dont you feel like it is a psychel that they do all of the hawkish talk in between meetings, during meetings they have dovish talk . And a lot of talk and not a lot of action. One could argue that has effectiveness in trying to keep markets from getting so over their skis and saying never. Never, never, never. Therefore you dont have to tighten because markets went crazy. Which is almost never. And by the way we will keep an eye on cisco here. We will get to that in a second. Does look like it is confirming those layoffs. But quickly is the problem with the feds to be transparent, if it tells us what it will do and does it, it prices in the action and they cant do it. I very much agree with the action. Fed policy has gone from infectual to harmful and negative Interest Rates around the world have done that and youre not getting any extra benefit. You dont get one of the things you will look for in my opinion is really more help from the fiscal side. I think thats one of the big stories for next year regardless of who wins i think Monetary Policy will try to pass up the time for the fiscal policy. And that brings up a point to about what the fed would raise in september with the election coming up the next month. I guess you know maybe the election is a nonevent as jason has indicated in the sense that it is still open sailing for them to do so come december. And i mean, we have to ask ourselves the question do we want the fed to raise because we are frustrated with fed policy and we are concerned about this unknown financial experiment. But do we think the feds should hike . Reality is do you think the feds have to be going right now with the economy . Im not saying this group. But most people for the last six to mine months have been complaining about a u. S. Recession. This is not a fed that is supposed to be aggressive here. It goes back to data. Like is it six of onehalf dozen of the other. Weve been at 2 . It hasnt been changing much. Why should rates change that much . Good point. Lets see if cisco is changing anything here. Josh lipton has more. Josh . Kelly, cisco is reporting eps of 63 cents. Revenue of 12. 64 billion. That is expectations of 12. 6 billion. And kelly, cisco is announcing restructuring. They are eliminating up to 5500 positiones. Cisco says that represents about 7 of the work force just looking through the release kelly, other items to tick, nongap total gross margin, looks like it clocks in at about 64. 6 and turning ahead to guidance kelly, cisco guiding for q1 revenue it looks like between down 1 to up 1 . Kelly, back to you. Thank you, josh. By the way, dont miss the first cnbc interview with chuck robins tomorrow at 9 00 a. M. Eastern on squawk on the street. What do you think of the results . The layoffs look lower than the reports were indicating. Not that big a change. Seems like the market response is much more about the fact that this stock has had a great run year to date. Not that they thought business was better but because of the mega cap trade. This is what says to me that stock is backing off a little bit here. If it grows gdp i was going to say and i think is a stock as mike said that people are in because of the dividend and will probably continue to stay and i think is one of those that stays within a nice range. It had quite a bit of a runup here. If it is something you are interested in you wait for a pull back. What were you saying, jason . Yeah. How times have changed. Cisco was trading at a hundred times trailing earnings. No dividend. Here people now trading at 15 times forward earnings as like 3. 13 times. Or 13. 5 yield. Mike is on to something. And they can generate a lot of dividend and they have become the dividend darling. I was going ask about the point you make too, carol, and not that you dont always want the huge Growth Opportunity but the fact you can get something relatively stable and a price paying at that dividend is that boring is the new good . Personally i will defer to carol, but i think so. I think thats true. I never like boring. But i do like a nice dividend. I think this is one of those names that there is a potential upside here. This is a business that is in transition. We have seen some of the bigger tech names be able to make that transition. So for the time being, the dividend play, but as they continue to transition the business model, you know, couple of years from now by can have a very different discussion, just wait and see for the time being. True. Tim . Carol is never boring. So interesting. And moving from 26 to you know over 36 on operating margins this move into Software Service security is a more interesting business, frankly. U. S. And Government Spending is actually better. China is better. Europe has been a disappointment. I think the risk is to the upside with the stock. Thanks for joining us. Good to see you guys. Cisco lower after reporting earnings. Top tech analyst will tell us if you should buy a stock next. And trump with another shakeup to his management campaign. These moves have worked in sports and business. But is it a winning play for trump . We will discuss it later on closing bell. Youre watching cnbc first in business worldwide. [rock music playing] [music stops] [whistle] [rock music playing] [record scratch] announcer dont let e. Coli mosh with your food. An estimated 3,000 americans die from a foodborne illness each year. You cant see these microbes, but they might be there. So, always separate raw meat from vegetables. Keep your family safe at foodsafety. Gov. Cisco out with numbers moments ago. Shares lower about 1. 5 . Company announcing 55 up to 5500 job cuts. Is this a sign of more to come in tech . Joining us is cisco analyst from jnp security. Thank you for joining us. Sees like there is a lot for investors to like but the layoffs, what do they signify . Any broader concerns about growth trajectory . Sure. Thanks for having me, kelly. I think the layoffs are a function of a transition that the companies had for a better part of a year. They replaced the ceo, beginning of the fiscal year. They have been working on a number of different organizational changes and i think this is the culmination after number of those elements coming together. It is a bit of a surprise. I think investors werent anticipating this. But i dont think i think thats bit aftof a setback in ts of investor. What do you think about the valuation given the sort of Slower Growth transition they make over to this newer business model. So, we are at a neutral and market perform. I think that the valuation is rich given that you are talking about a company that has been relatively flat for the last two or three years. In terms of modest growth at best. But i think that if they take some pretty bold steps to reposition around growth areas, then i think starts to get more attractive. I think it is a bit of a leap of faith to assume they will execute on that, you know, in the intermediate term here. Do they have to become a bigger choir . It is no secret what area they want. All for Security Services . Less of selling hardware that is in deflation all the time . So yes, i would agree probably. Some acquisitions are still to come. We havent seen a major acquisition out of them in a little while and i think under chuck robins, he certainly expressed a willingness to consider moves like that. I wouldnt rule that out. I think that they have good exposure to Cloud Technologies and applications at this point. But if they are going to reposition around that particular area of the market they still have to bolster that segment of the business in meaningful way. So i think an acquisition is in the cards. I wonder too what this means for types investors were in the securities. We were reminiscing in cisco in 1999. A very different behavior of a lot of these individual names so what is that investment for growth . What levels does it need to be at or have they pretty much gotten this one figured out . They have a lot of exposure to hardware a lot of layoffs are centered around hardware centric products. Networking, you know, switches and routers and things of that nature. I would imagine that they will deemphasize some of the more Competitive Price competitive markets that theyve got a lot of hardware exposure and then they can bring on new areas of growth which would be presumably security Collaboration Data Center infrastructure. All right, eric, thanks for joining us. Down a little more than 1 . We have earnings on all brands. Seema mody, numbers are out . Yes. Victoria secret, pink, bath and body works, 70 cents versus estimate of 59 cents. Revenue we knew about when on august 4th. 2. 89 mill billion versus 2. 84 billion. Light on guidance of 40 to 45 cents. Estimate was for 47 cents. L brands up, earnings beating consensus. Back to you kelly. Interesting that the Third Quarter echos what we saw which is that numbers were im sorry, tj maxx, that numbers were okay but guidance is light. Because l brands have within forshadowed these numbers and actual results not that big a surprise. But youre right. Not a lot of confidence in projecting ahead. Thats the story for you know physical retail for a while now. You dont have any real conviction about extrapolating these. But we have seen a different tail in retail here and i think it speaks to getting to understand the very specific companies because if you look at Urban Outfitters and you look at tj maxx. And you look at l brands versus things happening with lowes and with staples earlier today, obviously the consumer is being very particular about how they are spending their capital and under some cases making some tradeoffs. Very choosey. And they can probably let 3q go by but they have to get it right for holidays. Those l brand shares up about 2. 5 after hours. Donald trump shaking up his president ial campaign for the second time in two months. Up next, we will look at the moves and whether they can help him in the polls. And the Hedge Fund Manager. Can obama care be saved . About a fifth of new york Area Companies reducing staff in response to Rising Health care cost. Leading Health Care Expert weighs in on obama care survival prospects coming up. Kelly let me first by starting the context for the moves. Look at the survey monkey poll nationally. Showing trump down 50 to 41. Thats very large in president ial politics. Then look at Battle Ground states. Big deficits. Double digits in New Hampshire and pennsylvania and virginia for donald trump. Thats very worrisome. Whats happened after this bad stretch a few weeks, is he decided to shake up his campaign. Now remember, Paul Manafort serving as chairman had been trying to make him into a more conventional candidate to compete in the election. Donald trump saying i dont want to change or pivot. This is what he has done. Brought on Kelly Ann Conway to bring on the new campaign manager. She will travel with donald trump. Corey lewandowski saying she brings calmness to trump. Secondly he brought on steve bannon from the Breitbart News far right website to be chief executive of his campaign. Steve bannon has the kind of style that donald trump favored in the primaries in july for example on breitbart he wrote that roger ailes Sexual Harassment case is a plot by the democratic establishment to take him down. He made a movie out of the mobo clinton cash. What clinton camp said is they will have more conspiracy theorys out of the donald trump camp. The other potential effect that we might see is republicans disstancing themselves further from donald trump. Few strategists outside the Trump Campaign think he can turn his Campaign Around so increasingly republican donors are likely to look to saving their house and senate majority, kelly. All right, john, thank you. Hedge fund manager and conservative donor Robert Mercer is reportedly close with the new Campaign Management team behind donald trump. Mercer has also been linked to antiHillary Clinton political committee. Kate kelly joins us with a closer look at who the secretive mercer is and his ties to the nominee. Kate . Kelly, low profile Hedge Fund Manager bob mercer isnt someone you hear a whole lot about. The firm he coheads, the long island based Renaissance Technology manages more than 30 billion. And they handle computers rather than old fashion et human analysis. A mathematician joining in 1983 and his daughter rebecca originally supported ted cruz. And now giving nearly 1. 5 million to republican candidates making him the seventh most individual contributor to to families and donating 13. 5 million to super pac and entity developed now into an antihillary Clinton Super pac. Nicknamed crooked hillary. And beyond opposing clinton, mercer appears to be backing trump. He didnt return my phone call this afternoon for comment. As recently as late june, renaissance founder jim simons, outspoken hillary supporters, adding allegiance to trump adding it doesnt unit fear with business at ren tech. You can see where the Campaign Donations might come from. Renaissance Equities Fund up through early august and diversified fund up 11 . If his candidate won office some policy issues could potentially include reconsidering the Gold Standard as a possibility and deemphasizing the priority thats been set by the Barack Obama Administration to roll back climate change. This based on his apparent support, kelly, pour some of these movements. There is so much to unpack in there, kate, including by the way how well the, like algo rythmic strategies have done and scrambles. But the fact that these two guys are the top of the fund have diametrically opposed views but sticking with mercer for a second seems like his daughter kate is also quite involved and so you mention like some of the things that we might see come out of this. But what does it indicate to you in terms of the direction the campaign has taken . Sure. Firstly on rebecca mercer, she might be lower profile than her dad. I havent learned a lot about her but i do know she was involved with the clinton cash documentary. In terms of the direction, this is interesting, i would think the Trump Campaign probably felt as though it needed a kpamon. They are in somewhat awkward territory. And you know, donald trump is actually needing a stump issue to say Hillary Clinton has gotten some 38. 5 million in hedge Fund Donation answers the like and ive gotten 19,000. His point i assume that he is not in wall streets pocket a lot of his campaign was selffunded. Apparently the campaign had reached out to mercer. And official support and as i said they havent publicly declared it. But Kelly Ann Conway knows mercer reasonably well and knows traffic in the republican financer donors. Even if peers are not publicly supporting trump. Kate, it is carol roth. I wonder how much of the funding that he is putting forth, mercer that is, is towards trump versus some of the senate races which i think are you know equally if not more important than whats happening at the president ial level. I havent dug deeply into everything he has done donation wise. But the first sta testic i mentioned, him being one of the top donors to individuals, he is not one of these Business Leaders who says all right let me divide up some of my political cash here between sort of local candidates of both parties, he is very gop leading. He did support cruz and is involved with a number of super pacs. We will see with what happens with the antihillary pac. There was one going back it last year that i think had the support of paul sing earn ken griffin of citadel. This is a new one we havent learned a ton about and it is a new reiteration of what was once the Ted Cruz Super pac. We know there will be a lot more digging regardless, kate. Thank you so much for joining us. Time now nor cnbc news update. Lets get to sue herera. Sue . This is what is happening at this hour. Head of the European Olympic Committee is arrested on suspicion of ticket scalping. Patrick hicky will step down from his role temporarily. His arrest is the biggest by rio Police Investigating the selling of tickets on the black market. Dozens of people have been hurt in a commuter train crash in southern france. The plane traveling 85 miles an hour when it slammed into a fallen tree on the tracks. The tree brought down by a heavy storm. At t is following in verizons foot steps in raising prices of some of its data plans. Higher prices come with more data reducing the cost per gigabyte from many customers. Can you keep your plan if you prefer but you will have to switch to new rates if you want it increase data levels. New rates take effect on sunday. There is big competition cooking at texas state fair this summer. Eight deep fried dishes are looking to make it to the finals of the big tex choice awards. In the running, deep fried pulled pork funions. And deep fried jello. There you good. The winner will be announced next month. Cant wait. I thought funions were already fried. It is a refried, fry. I would probably try pulled pork funions. The bacon slider thing. Deep fried bacon and burgers on a stick. It is a burger that is stuffed with cheese. That is stuffed with a full hot dog. That is stuffed with bacon. And then they put it on a stick and deep fry it. It is amazing. We have Health Insurance segment. Yes. We will talk about obama care next. How appropriate, right . Exactly. Sue, thank you. Sure. Sue herera. Obama care might be on life support. Pulling out of most exchanges. We will talk to the Health Care Expert. And whether obama care can be saved. Plus, will kubo and two strings be the next blockbuster family movie when it hits the big screen there weekend . First time director Travis Knight who also happens to be the son of nike founder phil knight joins us coming up on the closing bell. Welcome back. Markets were down until fed minutes came out. Finishing higher. S s p up 4. Nasdaq up a point and half. Look at cisco. Trading lower after earnings. Moving down about 2 now down less than 1 layoffs slightly smaller than reported this morning and they did beat on the bottom line. Now aetna is back in the news. One day after announcing significant pull back in participation from obama care exchanges. Bertha coombs within what is happening now . Humana deal blocked in july 5th response and the request for them to explain how their participation would be impacted if the deal were blocked. They said that they would have to do that. That is right at the end of the second quarter. Tj crawford says the company didnt get a now would they have tried to hang in there next year if the deal was approved . Here is what i was told after aetnas earnings this month. It was our intention to use some of the synergies. From the deal. To help continue fund losses in the Affordable Care act until we could get through to the next administration. And under the next administration the expectation was that they could start it try to get to some sort of structural fix of the exchanges. Harvard professor told me ultimately washington needs to get together to fix the exchanges or next year he says we will see even bigger problems when it comes to accessibility. Kelly . Thats the question, ber that, thank you. The number of states where obama care policies are offered, some are concerned that obama care is now on life support. Joining us is robert sha chef ski and strategy associates. Thank you for joining us. How dire is it from your point of view . I think pretty significant. We can talk about aetna and what aetna is saying is that losses have accelerated in the last few months and losing about 300 million this year and they cant sustain losses and stay in the business. Whats important to understand is we are seeing that scenario repeat itself in virtually every state with virtually every Insurance Company. In tennessee for example insurance commissioner there Just Announced that the rate increases the Insurance Company asked for in june two months ago, commissioner in tennessee will allow them to open up the rate process and increase rates and already two of the Biggest Insurance Companies say they will go from the 25 rate increase they thought they needed in june to about 45 now. State after state we are seeing exactly the same scenario, losses, deteriorating losses, deteriorating conditions and carriers not able to continue in the longterm. That said, we spoke yesterday with patrick gar and he said it is the fault of the bigger players for not being as good on the ground as they could be. Take a quick listen. To what he had to say. Were not at a place where we should try to take the aca and get rid of it. And correctlily, how do we improve it . And is he right . Should the question be, is it a pretty grim one . This is not sustainable. I listen to that interview live yesterday and you asked him a question and you said so in florida, whats the blue cross rate increase . His answer is quote, modest doubledigit rate increases. Modest rate increases at the time of Health Inflation is 5 . This is not sustainable. This is the plan and not for profit through the country. Im seeing this daily, they dont have the profitis or the surplus to continue this for more than about a another year. I think youll see most plans stay in for 2017. But if we dont get very significant fixes to obama care, the math is simple. These plans capital continue the way its going. And that undermines the coverage that all these people have gotten. Robert, dits carol roth. And that obama care was set up for failure and they need to be addressed from an execution standpoint and political standpoint is it really realistic to fix it or ae easier to start over from square one . Well ill give you the mechanical answer from some of those in the Insurance Business for 40 years. It can be fixed. But now ill give you the political answer from someone who has been in washington for 25 of those years. Republicans dont want it fix it. They want to repeal and replace it. Democrats say we should have gone to the public option, government run plan in the first place. So we really got the political system fragmented here. Yes. I think whats important is to understand that republicans no matter who wins this election are not going to have the votes to repeal and replace it. It doesnt work that way. And democrats wont have the votes to pass a public option or single payer plan. So what the politicians need to do is to understand theyve got about year it fix this. And if they dont fix this, these vulnerable blue cross and local hmo plans that are the backbone of the obama plan have to exit and millions of people will suffer because of it. Yes. So we can only hope that after the election people will get a little bit real here. Yes. Just like you said, something has to give, robert. Thank you. Really appreciate getting your view on things. Coming up, a new study that activist are far more likely to target female chief executives than their male counter parts. Also, kubo and the two strings, the voice behind kubo and studios chief ceo joins us next. Youre watching cnbc, first in business worldwide. Of capital . But whats it cost to modernize a School District . Whats Critical Thinking worth . A basketball costs about fourteen dollars. What does it cost to build a new sports arena . Whats team spirit worth . A Telecommunications System isnt cheap. Whats it worth to talk to your mom . Whats the value of one more tree . A forest . A walk in the woods . Whats the value of art . Art open to the public. The value of capital is to create, not just wealth, but things that matter. Morgan stanley. Capital creates change. Phil knight from the most recognizable shoe company, nike. His son, is from a film company and he is making his directorial debut it this weekend. The story is about a young boy named kubo who embarks on a monkey and samurai beatle. Joining us is Travis Knight. Tell us the story about your dad taking you to japan when you were young and how that culminated in your career today. Yeah, when i was around eight years old my dad let me tag along to one of his trips to japan. I grew up in portland, oregon. The pacific northwest. Japan was unlike i ever experienced. From mov from music to movies to style of dress, it was completely different. I came home changed by the whole experience. This film pays homage. It is a life of love i have for this culture. Have you ever had pressure to join the shoe business . My old man, his dad was a lawyer and he was the publisher of oregons second largest newspaper. Whenned told his dad he wanted to be a cobbler, i was a business disappointed. So the knight boys have a way of disappointing their old elders. So this was a great role for you . Yes. I had never been on an animation before. Going from a live action film where you know you get to have all of the physicalities to express your emotions in the character to something to restrictive because you only use your voice, it was hard. But working with travis and my mom, they made it very easy for me. Travis, i wonder, what is your theory on why animated features are essentially really bigger than ever in terms of the mix and movies out there and doing great business. It seems like every company is rushing for these animations. What is it that right now is in favor of that . I think that animated films have really gained its sophistication and complexity and great story telling and pushed off to the side and a babysitter for kids. I think over the years people have found that you can use this medium to tell interesting stories that can appeal to all members of the family. And so when you take a, you know, your family to the film in the cinema you know the adults can find a level of appreciation and hopefully it is layered and as well as kids. I think that there are so few films geared towards families in their entirely animation is one of the few things geared toward the entire family. And when you can tap into that and people are excited to share experiences with their entire family. And travis from a marketing perspective how important is online and social for getting the word out and getting viral buzz around a movie like this to give it that long tail and get people to come and see it . It is becoming increasingly important. When we started ten years ago, it wasnt so much of a thing. Now social and online is a huge portion of where our marketing dollars go. It used to be traditional newspapers, magazines, tv, which nobody even does newspaper any more. Those are two pretty good things. To have. G guys, thank you for coming down. Best of luck this weekend. Box office has been soft this year. But they need original films. Fingers crossed. Yes. Travis and art, appreciate it. Thanks. Buffalo wild wings down 17 over the past year. But it may not be the Stock Performance that landed management in the crosshairs of an activist investor. Thats when we come back right. Here i am. Building a jet engine. Weve been hearing so much about how youre a digital company, so you can see our confusion. Ge is an Industrial Company that actually builds worldchanging machines. Machines that can also communicate digitally. Like robots. Did you build that robot . Thats not a robot, thats my coworker earl. He builds jet engines with his human hands. What about that robot . That is a vending machine, ricky. John, give him a dollar. Now a few theories on why that might be proposed in this paper one is simply that perhaps women are seen as more easily swayed by an investor that can come around more or something about management style. More collaborative less assertively aauthoritative type posture something that activists will flop toward and there is this glass cliff theory. It has been out there a while that companies are more likely to elevate a woman to the ceo job when the companies themselves are troubled or in transition or some other trouble. All those things feed into this. I wouldnt say Buffalo Wild Wings meets all these criteria because sally smith is ceo. It is her company and it is something she is handed at this point but mar ccattos letter, u can see maybe that fits with the idea there is a male female divide. Ive been looking at this for a while and im going with door three. If you look at difficult situations. Look at marissa mayer, yahoo . Mary bera, gm. Meg whitman, it seems like they tend to go to a female ceo perhaps after some of the likelier candidates who perhaps were male had passed on it. I think you are seeing that collection of the 27 being indicative of those types of positions that they are getting. Versus anything that has to do with targeting women because they are easily swayed or a bet are sparring partner or any of those things. One of the little nuggets too, i cant remember if the professor or somewhere else made the point and measured by the female executives is good if not better than their male counter parts. Exactly. The idea they are given less after shot or basically are under harsher light, without real justification based on how the companies or stocks perform. We are watching. The number of female ceos is so small and fortune 500 you can track case by case. Mcdonald may not be the first thing that comes to mind when you hear olympic athlete but the golden arches are so popular in the Olympic Village, it has today take drastic measures to keep up with demand. Those details, next. From long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . Ra . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the Global Economy. And you thought we just made the gas. Energy lives here. Welcome back. Mcdonalds isnt loving olympians today as much as when the games first started. The fastfood chain is limiting the amount of food olympians can order for free, up to 20 items. Their order is pushing out everybody else. You can see the lines so now if they order more than 20 items their order drops in priority. You may wund wonder, how much are these guys eating. Went you may see, all pictured there. Might be case in point. Not even a swimmer, you know. Were talking 20 items in one sitting. Were not talking 20 items over the course of their visit. Thats amazing. But it does look very delicious. And i will say, every time im in ohare airport, the longest line is always at mcdonalds. There are a lot of people loving it. Not just the olympians. And nobody gets it free there. Definitely not. By the way, mcdonalds itself is different. In london four years ago, they had one of the biggest mcdonalds ever built. This is a smaller operation and the fact that there is only mcdonalds to pick from is part of the problem. Clearly a capacity issue. Someone today make a decision, committee, lets make it 20. Nice that they want to take care of other customers as well. Good policy. Have a lot of mcdonalds and deep fried items to go track down. That does does it for closing the olympics, next