In europe things are in the red. The dax and cac are down 0. 6 . The ftse off by 0. 8 . Knitly, sto ly in italy, stocks are down about a percent. Right now the dollar is up against the euro which is trading at 1. 0874. Down against the yen. And crude oil has been weakening even as the dollar had been struggling with issues. Wpi down abo wti down by 1. 43 . Have we shown the tenyear . No. I would show the tenyear. 2. 40. I will do a story in a second talking about fed speak again. Who cares about the fed anymore, theyre irrelevant, not at 2. 40. 2. 40. We were on our way again. We were on our way again theoretically to 2. 60, 2. 70, 3 . What does that say . Does that say 1 gdp number in the First Quarter stays at 1 . None of these things in the trump agenda come on time . Or big as expected . Are they delayed . Does trump care lite mean tax reform light . Or do we even get the taxes . So these ive never been in congress, i never will be. But theres a lot of kabuki dance. I understand that. A lot goes around. A lot of whipping goes on. But everything im hearing is there are 30 guys with their feet in cement. You can only lose 22 in the house. They dont have the count right now. Hard to believe wall street will be watching every single vote count tomorrow night. And that those 30 have complete have direct opposite concerns of the senate, of the guys in the senate. We will have a democrat on today, Ranking Member on the Budget Committee to talk about trumpcare. His whole opinion is moot. The republicans think they expanded the entitlement state, these guys want to expand it more. Im interested in hearing is there room for any sort of compromise when you get to taxes . Or in the second and third rounds, will they will they cooperate and try to lower costs . I wouldnt bet on that at this point. For wall street what matters, can you get to tax reform . If you can find any sort of cooperation across the board, maybe. Maybe this market sell juf cou selloff could be the leverage republicans need. Trump has been saying markets have been doing fine since ive been elected, all of a sudden the agenda is threatened and we get a selloff. Not quite the t. A. R. P. 1,000 pointer. No but it could be binary sort of events. Weve done stories about dont chase this market. I wrote down where it was, 2316 on the s p. Were at 2344. We were telling people dont buy at 2316. Even if it pulls back, its above where you told us not to buy. But it means so much is riding on thursday nights vote. If it happens. If they dont whip these guys into shape, its oh, a couple of guys got a soccer game for the kids. There will be an excuse. Would they push ahead with a different version of the healthcare reform . Would they pivot to taxes . Thats the thing. You have to do it in this order so you have the savings you can build on for the tax reform. If this gets bogged down, i wonder if they pivot. Forget about infrastructure. Keep your eye out for potholes. Theyre not going away. Stocks to watch, fedexs Third Quarter earnings and revenue rising during the peak Holiday Season but profit missed foreca forecasts. The stock initially dropped as much as 3 , but then stocks recovered after the ceo fred smith said the company is optimistic about higher margin growth. We believe strongly that our Strategic Investments to expand our global scope and our portfolio of services will significantly increase longterm profits. And nike reporting higher Third Quarter profits but revenue missed forecasts. Among the reasons, currency headwinds, and increasing u. S. Competition from rivals adidas and under armour and future orders also disappointed analysts. On the Conference Call, Ceo Mark Parker said nike will adjust operations to meet customers changing demands. In product were doubling our cadence and scale of innovation through performance and sports style. Throughout our supply chain were doubling our speed from product insight to delivery to the consumer. And in the marketplace, were doubling our direct connections with consumers through digital, membership and personalization. We will talk to a nike analyst in a few minutes. Nike has been trying to guide analysts away from the importance of the futures orders, yet futures orders come out on the Conference Call and it drops like a stone. I dont know how they can be tied in. We will ask the analyst on whether or not they think futures orders is important. Sears holdings warning it faces substantial doubts about its ability to stay in business. Earlier this year the parent of sears and kmart announced plans to close 150 stores and just last month said it would cut costs by as much as a billion. The fed is still in our lives. This morning we have three guys that many people have never heard of. We have, because we follow these guys. This guy will talk. Thats dallas fed president , robert kaplan. He says the central bank should hike rates two more times this year and continue to gradually trim back the balance sheet. He is a Voting Member of the fomc. Then you have cleveland fed president , loretta mester. She says she favors the central bank takes steps to reduce its 4. 5 trillion balance sheet. Then when you go up to boston, boston fed president Eric Rosengren spoke late yesterday and warned that the run up in u. S. Real estate prices could intensify future economic downturn. Hes urging regulators to consider tools beyond Interest Rates to help that sector. Heres the tenyear that we were eluding to. 2. 4 . Its not far from a 2. 39 handle. I dont know what that says. We have been confounded by it. Theres flows. People like bonds over here still. Even i therd that theard tha trade is off now. Positioning in terms of a bullish dollar is off . Is off. Is that because they dont think the border adjustment tax is going through . Where i think it if i well find a reason, but i think it got totally overcrowded. Everybody who wanted to get in was already in. A lot of times that will happen. In europe, the Political Developments are better than expected with macron winning the first debate. Well see. He tried to watch some of that debate. Did you . In french . Yeah. That was the problem. That was the problem. I hear a word every once in a while. Sabotage, i hear i would hear a french word every once in a while. No. But they were the guys started out, macron, hes new. Kind of new. 39 years old. Hes a bit shy, i think. Then the other guy, talking to someone yesterday. The other guy. The bribe was a million dollars. Really . You can get in trouble for that . Over here it would have to be 100 million not really, but over there, thats a lot. There are some people that think that the le pen numbers are like the Hillary Clinton 98. 5 numbers. Including mark brandt. She will win the first round, but consensus is she gets crushed in the second round by macron. But they are saying theres a whole group of people not polling. Mark grant stuck with that idea. Hes been right about a lot of issues he called up to this point. An update on a story we told you about yesterday. Secretary of state Rex Tillerson had planned to skip a nato meeting next month, but now the state Department Proposed new dates for that nato meeting that would allow tillerson to attend. Changing the meeting date would require the consensus of the 28 members. Last night President Trump said he will attend the nato Leaders Summit in brussels scheduled for may. The expression, you should never say has the meeting started yet in they say, no theyre waiting for you to get there. Never go to a meeting that can start before you are there. Thats whats happening here. You cant have a nato meeting without Rex Tillerson. 70 of the defense outlay for nato comes from the u. S. So youll have the meeting with us . The head of nato already said hes interested in changing the dates. How can you have a nato meeting without Rex Tillerson . Who will buy the drinks . Its been overplayed to say we dont care about nato and thats why nato couldnt do it. The head of china is here, the president is here, with all the issues in north korea i wouldnt want him missing a meeting with china either. I can see all the euro caratcarat eurocrats at dinner, heres the bill what . Me . Where is Rex Tillerson . President trump is making a push for the new healthcare bill. Eamon javers has more. Its a day of wheeling and dealing on capitol hill. Today is the last day for the Trump White House to wrangle votes for its healthcare bill which is facing a vote in the house of representatives tomorrow. As of now the analysis is the Trump White House may not have the votes. Last night the president did not sound like a guy who felt that he had the votes either. Take a listen to what he had to say. We had to go with the healthcare first. And were doing well. I think well have some great surprises. I hope that its going to all work out. I hope that its all going to work out is not something you say when you know you have the votes in the bag. This white house has some work to do today. Last night the president also had a message for the business community. Heres what he said there. We will do everything we can to lower business burdens and to make it easier for hour businesses to thrive and compete, but in exchange they must hire, invest and grow in america or were not giving them anything. Okay . So i dont know if this is too much analysis, if you read between the lines, it does not feel like the president is as enthusiastic about this healthcare proposal. He said we had to go first. We had to do it. We were forced into it because of the legislative calendar, as he is excited about reducing business burdens. That animates this president that they want to get done the but the two things are linked on the legislative calendar. You were talking about the stock market pullback we saw yesterday. In the White House PressBriefing Room i asked sean spicer about this. This is a white house that has said they view the stock market very much as a report card or a realtime barometer on their performance. I asked spicer about that yesterday. He said, you know, look on a down day you cant look at one day in isolation. You have to look at broad business confidence. Theyre not necessarily using stock market yesterday as the report card for their performance. Back over to you. Might not ab report cabe a rn the performance but a worry or trepidation about what happens tomorrow which could delay tax hikes. Thats obvious. Youre not getting a 14 move and then say, wow, you guys suck because its down a point and a half yesterday. You wouldnt do thashgt rigt, r . A lot of people have total horror watch the market go up after trump was elected. They were waiting and waiting, one day i had people on twitter declaring victory yesterday, that trump has terrible business policies, terrible president , because of one day. On the s p, like i said earlier, were still about 2 3 above where most people already said were way too high. Even if you do pull back 5 , youre still above where any way, everything is political now. Drives me nuts. I dont know if i can continue. Everything is political. That is true. My point was a more narrow one. This white house said some things about the stock market that white houses typically dont say. They dont normally say, yes, judge us by the storm performance. Yes, we view that as a metric. They normally stay away from the stock market. Because frankly oftentimes they dont understand it. Also they feel like it can come back to bite them if they embrace a couple days up, then theyll have downturns and answer for that. This white house has said Different Things about the stock market. Do you know how many times the obama people said the gdp never got above 2 , but the stock market tripled. They say that constantly. You just have to be consistent. Just say stock Market Performance is a measure. One day when it goes down 200 you have to own a oneday pull back, when its up 14 . Fairs fair . Thats ludicrous. If you believe the storm Performance Measures the president s success broadly, not just in one day or hour, you have to apply it both ways. Factor in consumer confidence, Small Business confidence, animal spirits, factor in everything. It shouldnt be a revelation to all these people that if youre that youre a little friendlier to job creators that things may look up. Suddenly people are saying golly, some of these pro business things may help the stock market. Thats not even a stretch. That has nothing to do with trump, its pro growth policies. Theres no question that wall street welcomed two main thrusts of this policy. Business tax cuts, and deregulation. The idea that businesses would have more room to maneuver o out without government coming in and telling them what to do, that is something they liked. And trump saying we could have let this thing collapse. They introduced this entitlement, the democrats did. Now trying to fix it will tarnish the republicans. If you just let it collapse he said you cant let it collapse, like the guy from cant have it collapse. And when you try to fix it, its like thank you, sir, may i have another . Let me bend over. Can i have another . The obama people felt the same way about it. We promised to do something on healthcare. We were going to propose a major reform on health care, there were outraged town halls, the death pab panels. This was a quagmire for the democrats as well. This has been a quagmire since 1993. This is a tricky, divisive bigger issue. Now people will just make fun of you for realizing that. Who knew it was so complicated. All right javers. For more on the markets, joining us is joe zidel from Richard Bernstein advisers. Here we are saying it again. Bernstein again. He was on monday wasnt he . Yeah. Is this the bernstein Advisers Network . That has a ring to it. And simien himen from pro shares. It got weird that almost every day the market went up. So weve been waiting and waiting, but we really do sort of are we overplaying a 200 point move yesterday . Is this the beginning of something that turns into a pullback . I think people are overreacting. Becky, in your intro you talked about how the markets had not had a more than 1 down move since october. Its the longest streak. 109 sessions. Thats the longest streak since 1995. We should put that in context. If you think about the conversation yesterday, the narrative that dominated traders and investors yesterday, it was about trump will get hung up on healthcare. He cant get to tax reform, Everything Else. What was missing from the dialogue or conversation was any talk of fundamentals. This whole this whole market move since the election has all been about the trump rally, the trump bump. But what people are overlooking is here we are with Fourth Quarter 2016 earnings now behind us. S p 600 s p 500 across the board had tremendous Earnings Growth. Small caps alone, year over year Earnings Growth over 90 . Yet the small caps yesterday bore the biggest brunt. The russell 2000 lost all of its gains for the year. In the last 12 months we have been in a classic earnings driven market, but its been all about politics, all about healthcare, then tax reform. Everything else. The underlying fundamentals are pro equity, pro cyclical and things continued to go up from her here. Im glad you mentioned small caps, that is an opportunity. The underwer foperformance of s caps wasnt just yesterday, it was all year. People like the trump trade and the domestic aspect, but the hair on it is you get more leverage in small caps, thats sensitive to fed hikes. One way to play this is focus on quality companies, dividend growers, better Balance Sheets that can get some of that benefit without the headwinds of the higher shortterm Interest Rates. Why shouldnt we think this is the start of a 5 correction . Naturally within the market there should be a 5 correction. So why go in and buy down 1. 2 . Youre right. You know 5 corrections tend to happen, and tend to happen more often than people think. Theres a technical aspect as well. We have friday expiration, so all the options contracts expired. We went to this week, and there is momentum coming into the market. Thats creating the selling pressure that we saw yesterday. The bigger question comes down to not the next 5 move. We know using the s p from 1960 on, almost five times a year the market will sell off five times or more. The bigger question is what do conditions like like six months to a year from now . If you are in the camp that conditions will look better, use the weakness as a buying opportunity. Our view is theres a lot of underlying earnings momentum. Fundamentals are pretty good. People look at this market and say its expensive. It has to pull back. Sure. When you look at the earnings momentum among u. S. Equities alone, the s p can basically go up 10 from here, from where we are right now. By the end of the Third Quarter the pe could be lower. So we have enough Earnings Growth he says buy dips. Do you say buy the dips or sell i agree with the math. You say buy the dips or sell buy the dips. Interest rates are still low enough to support pes. Thats a real question, isnt it . Theres an opportunity to look outside the u. S. Now that the dollar is quieting down its run. Valuations are cheap. Emerging markets are also beneficiaries of growth. They are already up 8 this year. Theres room to run . True. And they outperformed the year before. But thats a catch up from the beginning of the finlt cancial crisis. All right, gentle men. Bernstein. Meanwhile, look, t