Arthur, president of the United States it is a big day on power lunch, hon. And it starts right now, jon najarian, dont ya know . Esther a. Arthur was a friend of mine welcome, im Tyler Mathisen. What a beautiful turn you made, nick that is good what else is happening this hour amtrak and lyft announcing a partnership beginning today. Customers can use the amtrak mobile app to access the lyft app to request a ride. Presumably from the train station home or whatever u. S. Automakers reporting sharp sales declines in july fiat, chrysler and gm, down double digits. Ford sales down last month and credit card losses hitting a fouryear high, according to ratings. The average chargeoff rate, the percentage of debt thats written off as a loss, came in at 3. 29 in the Second Quarter the eighth largest card issues also saw their chargeoff rates increasing what some say is a worrisome sign for the markets and the economy. Melissa. All right, tyler. And welcome to power lunch. Im melissa lee. We are on the hunt for dow 22 k. Havent hit it quite get but the dow did manage to knock a new high in the session. Some eyepopping stats on the dows run. It is now up for six straight sessions if we hold here, it will be its fifth Straight Record close, its 31st of the year not bad, bob a lot of numbers there, melissa. So the good news is, the dow is really on fire, folks. The bad news is, its kind of a concentrated rally so were just at the door of 22,000 let me show you what led from 21,000 to 22,000 folks, its mostly boeing. 400,000 points is boeing mcdonalds contributed United Health contributed, caterpillar contributed. But all 26 of the rest of the dow components only aadded to 150 of the points. Its concentrated. How on fire is the dow take a look at this were statistic. The dow industrial up 240 points in the last four days. The s p is down, folks you dont see that very, very often. I cant remember and theres boeing, just take a look boeing is up by 10 in the last four days. That adds about 70 points to the dow. You see what i mean . Priceweighted, big movers, move up suddenly. And you start moving the index along with it. What we need here is some new leadership so heres some ideas oil stocks chevron, good numbers. The stock has been moving up as oil has been moving towards 50. Procter gamble, good numbers stock not doing anything for a while, it too started moving up since its Earnings Report. How about retail doing better. Walmart, waiting for the numbers out. But in the last four or five days, it too has been creeping up and thats why we keep hitting new highs. Little, little revolving into different sectors. Guys, back to you. All right, bob, thank you very much. And as bob said, folks, lately everything is up. Stocks are up. Earnings are up. Jobs are up. Wages are up but you know what . Its good news, though its in the past we want to know what is going to happen from here on out, and for that, kate warren, principle investment strategist at edward jones. Kate and craig, no doubt smiling because their funds are probably up, as well. But kate, again, its not to be a sort of pollyanna, but that was in the past. We want to know what is going to happen are you as optimistic, given the run we have had in the last couple of months and really years, that we can continue to see these kinds of gains for equities i think were going to continue to see gains. But i dont think theyll be these kinds of gains so im optimistic, but not quite that optimistic. And the reason is, were going to continue to see solid Economic Growth. Its not stellar, its not improving very much. But its good enough and we are seeing better earnings and better than expected earnings. And i think its really earnings that the catalyst for the rise in stocks we have seen. And well continue to be the catalyst for the rise in stocks going forward. But expect a bumpier market and not as smooth a ride and not as big gains as we saw in the first half of the year. Kate, i guess the question out there is, not why are stocks up we get that. Earnings are up. How are earnings able to grow at 6, 7, 8, 9 when the gdp is growing at 2 . Either, a. , the gdp number is maybe not as trustworthy as we think it is. Or b. , companies are doing it by cutting costs, and theres only so many cuts you can make. I think theres a third source of growth, and thats the fact that the International Economy is finally starting to grow and many of the Companies Reporting better than expected earnings have international sales, and they have been stellar. In addition, over the last few years, what we have seen is Earnings Growth because we were cutting costs, just as you said. But now theyre reporting stronger than expected Revenue Growth and its that sales growth that i think has been the real positive that people forgot about. And its likely to continue to drive stocks higher. Because as companies are selling more, those cost cuts and that cost control is still in place, and that really gives you a lot, dropping to the bottom line faster Earnings Growth, as well. So it seals really i think the catalyst and then the future. So craig, one of the things that stands out to me as the dow outperforms a couple of the other barometers is that the peculiarity of the way the dow is calculated, namely that it is a priceweighted index in which higherprice stocks like boeing drag the tear and drag the index with it, unlike nasdaq, unlike s p 500, would you talk about that a little bit and how the dow can be a somewhat misleading indicator of Market Health sure. And you can extrapolate that over to the s p. This has been an incredibly narrow market. And its with 60 of the money thats going into the market, going into etfs, theyre buying the same stocks and so the very thing you talk about, the rich getting richer, is whats driving things and so at hodges capital, what we see are some very mispriced stocks, some real disconnects in the market and i do like the rotation we are seeing a healthy rotation out of the momentum stocks, and into some of the laggards out there. And i think thats a very, very healthy i think what it matters to your viewers is what you own. You need to own things that can move next quarter, and next quarter. Not the things that necessarily have been moving and i think thats a little bit of the fallacy thats out there right now. So when you look at craig, i know you like the smallcap Regional Bank specifically whats the main driver there i mean, im guessing its not a steepening yield curve at this point that thats the main factor youre also saying that texas is one of the hottest banking markets in the country, which is interesting to me, given, you know, the question mark next to the Oil Market Still sure. And the perception has been that the Energy Situation would drag down texas banks and that was the real disconnect of 2016. Made tremendous money. But the regional texas banks, the legacies, the independent banks, the triumph banks, those names, smaller names, theres been a lot of consolidation. And its probably one of the best economic situations in the country. The job growth in this state and theres a lot of son coloradodation you see a lot of Smaller Banks starting to eat you know, buy each other up and such and so those things are very, very wellsituated and if you look at the demographics over the next 20 years, these banks ought to do incredibly well. Guys. Yeah, weve got to wrap it up there. But well get you back on soon, especially with these markets. Kate and craig, thank you. My pleasure. Now a technical look at the markets. What the charts are saying about where we go from here. Joining us now is katie stockton, chief Technical Analyst at btig. Katie, great to have you with us the focus today, as much as professional watchers dont focus on it, is the dow. Lets go with the dow. What ive been noticing and what i lot of watchers have been noticing, a potential breakdown in the transports recently the transports down, what, 4. 5 , 5 , in just the past month alone. Is that a warning sign for the dow . I dont think so. I do think that the dow industrials are poised for a pullback but i wouldnt see it as a warning sign i know a lot of people talk about dow theory whenever you get a divergence between the transports and the industrials but i wouldnt read too much into it. The dow theory really, the tenets dont describe it as such so while the transports may exhibit down side during pullback, i dont see it as a warning signal here. What sort of pullback are we talking about, and are you seeing the same commensurate pullba pullback from the s p 500 . This would be a natural place for a pullback for both of the major indices. You can see theyre approaching some resistance around 22,000. Thats a round number. Youll notice at past round numbers, 21,000, 20,000, there was shortterm resistance at those levels it would be a very natural place to see it pull back for the dow industrials, and for the s p 500. Almost reached a measured move price projection from its previous breakout. So you have a lot of reasons to expect a pullback just based on the levels that are in play. And also, of course, you have overbought conditions and what could be described as overly complacent sentiment. So in terms of what the leadership will be on the down side, you mentioned transports but in terms of the Dow Jones Industrial specifically, would it be the stocks that led the most i mean, for instance, a boeing are you most concerned about the ones that have advanced the most i am concerned about the mean reversion we have already started to see, where the overbought stocks like the facebooks of the world, or the boeings of the world that have really run up theyre looking somewhat overextended here. Whereas youre catching a bid in the more oversold areas in the market, say, energy, or retail i think that will persist, but really for just the next couple weeks, and that will ultimately give way to a buying opportunity. Whats the dollar telling you . Dollar weakness is really persistent, isnt it so we have a down trend, of course, in the dollar index. And we have seen a pretty major breakout in the euro against the dollar so we do have targets for the euro that are higher, and therein would expect the dollar to see down side follow through, if not immediately, ultimately downside follow through there. So is a weak dollar supportive of equities because thats the conventional wisdom, and thats what we have seen so far. Yeah, i mean, you look at these correlations, and they really break up at times and theyre just not that reliable, except over the very longterm time frame so i think that weve already seen equities forge higher, and, of course, emerging Market Equities forged higher, and i think that trend can persist beyond the long term. Katie, thank you. Shortly after 1 00 p. M. , and so far nobody has been fired at the white house today that we know and the administration is moving to push ahead and get its agenda back on track. According to our next guest, that could be a heavy lift veteran republican strategist, mike murphy, says the president has created a lord of fesli atmosphere in the west wing. He joins us live, next i know i got a loan 20 years ago, and i got robbed. Thats why i started lendingtree the only place you can compare up to 5 real offers side by side, for free. Its like shopping for hotels online, but our average customer can save twenty thousand dollars. At lendingtree, you know youre getting the best deal. So take the power back and come to lendingtree. Com, because at lendingtree when banks compete, you win. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. It has been a rather quiet day in washington. Hey, at least so far but the questions that everybody still wants answered are, if the staff changes may finally be over and the work of getting things done can finally get started, especially with tax reform Kayla Tausche is live at the white house with more. Reporter brian, it might be quiet figurely, but not literally. Forgive me for the work being done on the white house lawn and bear with me during this noise interestingly, just a day after the ousting of communications director, anthony scaramucci, the New York Times is reporting that former fox news executive, bill shine, is in discussion with the white house for a potential Communications Role well see where those conversations lead but the white house is moving on in the policy arena, and beginning discussions over the debt ceiling and health care for instance, secretary mnuchin meeting with senate aides, and a meeting set to take place here at the white house this afternoon on health care and other issues with general john kelly, the former marine commander, who is now charged with coral alling all of the personnel here at the west wing. Here is senator ron johnson of wisconsin, who was ambivalent last week when he voted yes on health care, talking to nbc news last hour about that meeting. I spoke to governor walker. I know he was at the white house yesterday, ill be going over there later today. Obamacare is a mess. Its not something we can stop on leader mcconnell left the bill on the calendar. With this reconciliation, perhaps we can go through september 30th so were going to keep working on this. Reporter on a legislative front, one bill that the president has not signed is the sanctions bill that senate aides and gop aides say was sent to the white house midday on friday yesterday, the white house said it had not received it, although today they say they have but the president has not commented on this bill specifically, or the discussion by russia to retaliate by moving to expel some 800 u. S. Diplomats out of the country before that bill was even signed well see if and when that bill is set to be signed this week. And that is sure to come up with a press briefing within the next hour as for the public schedule, the only thing on the president s schedule today publicly is an event happening this afternoon celebrating anniversary of the Small Business administration, where about 100 Small Business leaders are set to be here at the white house, where were told the president will be making a speech, touting tax reform well bring that to you a little later on guys, back to you. Kayla, thanks very much President Trump keeping his phone, yes, and he is back on twitter today, telling folks that only his enemies and the fake news want him to stop tweeting so will john kelly, mr. Trumps newly appointed chief of staff, be able to control the message and the man he works for joining us is the veteran republican strategist, mike murphy mike, welcome. Good to see you. Who needs whom more here mr. Trump or general kelly well, thats a great question it really, in any successful white house, is a partnership. Youve got to have a president who trusts the chief of staff to empower them enough to run a staff process thats orderly and effective, and has the confidence of the other actors in d. C so theres no doubt the general kelly, by experience and by temperament, is the kind of organized, squared away, fourstar marine who could bring order to the process but only if the president , who has essentially been his own chief of staff until now, is able to invest in him. And that is still the open, open question you know, President Trump is not a young guy. And hes not the kind of guy who has changed a lot in his career. So this would be a challenge for him and kelly. That brings me to a question im going to ask you in the next hour to our guest, who has written a book on the chiefs of staff. You know, i heard Corey Lewandowski on one of the sunday shows that anyone say that anyone who thinks they can change donald trump does not know donald trump. If that is true, can general kelly succeed in his job no. And there will be more anarchy and general kelly will eventually resign or be fired. I think the general is probably trying to find a hybrid approach, which, while not optimal is better than the thunder dome, lord of the flies thing they have now with everybody knifing each other in the chest. I applaud him for his day one move when he took the job, im sure the president made assurances, you will be in charge and he tested that by firing the infamous mooch now, that was an easy firing, because mooch had gotten himself in so much trouble the question will be now, on day two, three, four, to 200, can the general put a system in place that makes this an adult white house, not a romper room and ultimately, the president created the atmosphere hes going to have to be a partner in uncreating it and, you know, lewandowski may be right if nothing changes, then the problem is not going to get fixed. Youre right, mike. And scaramucci made it very easy for kelly to fire him, and for people to justify the firing at the same time, you know, do you think that there needs to be more sort of machiavellian firings in order to prove, really, that he is in control . Do you expect more heads to roll i wouldnt be surprised i mean, there has to be order. And one of the challenges of the Trump White House is the president runs his own kind of Rogue