Stop. How is spain doing your ask, italy doing . We dont have it today. Oh, my gosh. My kids are there, the italian gdp is going to come out. Come on, guys. We were lower in europe. Back to the big three. The joke has been the last few days weve included spain and italy, not that they are inside joke. Thank you. When the show starts. Yeah. Im sorry. Were in the show. Okay. 10year note yield hanging around 1. 5, where its been. Were a bit below that today and wti had been up there was a rally when for some reason people believed the saudis or their jawboning. To our road map this morning and it does start with the markets. The dow, s p, nasdaq closing at record highs yesterday. Where do we go from here in big Retail Stocks on the move this morning after some earnings. We also got overall retail sales. We will break down the busy week for the sector and go live to rio, of course. You saw carl, the u. S. Racking up a lot of medals. Carl is talking to the athletes and will have a lot of good stories for us. It was a record day on wall street with the dow, s p and nasdaq closing at record levels on the same day. This was the first time that had occurred since 1999. So far were set to open a bit lower. Retail sales coming in below at least what the street was expecting that being the overall, retail sales in july. Auto and gasoline down 0. 1 . There had been an expectations we would get a 0. 3 increase. Yeah. Im not buying that. Not buying it . No. Im a bottoms up guy. I try to find a retailer that didnt have a good month. Its very hard. Other than gap stores. Good month versus expectations. No i really want to believe year over year sales declines are good. No. Thats very true. Its relative, not absolute. But the fact is, is that the backtoschool season was set up well. Whatever numbers you have in the past may not be as important as the future. The inventories are leaner than i can recall at any time since the environment became promotional a couple years ago. Denim is selling well, knits, very good time in mens and im wearing a tie that is a pvh tie. This is exactly the hottest selling stuff in a lot of these stores. Right. Traditional pvh apparel. Its calvin klein, they have 50 share in shirt and. I we will drill down on some of the reports out nordstrom out and jc penney. I like. Talk about the Broader Market for a moment because one of the only benefits of getting older we were around in 1999. I was reporting. You were running a hedge fund. Indeed running a hedge fund, talking 40, 50, 60 times earnings for cap stocks. Stock splits that moved stocks up 20, 30 . Splits. Which have no fundamental value. No. I mean splits were something, used to think which stocks are going to split next was an issue, largest cap stock was cisco sold at 60, 70 times earnings. I did. We saw cisco 600 billion, microsoft, ge over 40 times earnings but three months away from the top. Okay. And the nasdaq then which weve finally reclaimed 15 years later. Look at cisco as an analog and will help people. 13 times earnings 3. 2 yield. One of the three highest companies in terms of the amount of cash on the balance sheet. This is not the cisco of 1999, but we were here because of the juxtaposition, too juicy not to talk about it, but i like the cisco now because the cisco now, which does report soon, im not saying buy it ahead of the quarter, but a lot more rationality. We will talk about a stock today that happened to have a remarkable number, acia, this is one of these companies that basically its a disruptive telco play. Its a profitable company. Its scorching, going to have a remarkable number, up more than the most of any stock. When on the Conference Call you understand why, a better mouse trap to make it so we have high speed video with the chinese company, not trying to get a big mouthful in, but there are reasonable valuations on companies that are profitable and then there are companies that are profitable that typically werent 1999, that we are putting a multiple on that, while kind of outrageous, but youre looking at situations how do you value a company, some of these companies are growing 100 that are profitable. By the way, im talking about about ebitda, not adjusted. Understood. Not even adjusted. Youre right. Clearly nothing the similarities to 17 years ago are slight. But, of course, at that point the market was recognizing we were at the cusp of a revolution. David, we were wearing hats and some of those we were. We were wearing a lot of hats. At the cusp of a revolution again but its different. Its Machine Learning. Its artificial intelligence. A. I. Its theres hp, i hope we get to do this. Dont know if its a faber report. Meg whitman bought silly graphic. Thats Machine Learning. The quarter that n individual ya was Machine Learning, Mark Zuckerberg dropped in the facebook Conference Call if you can have the interactions in an automated way where you fire off a text and get a response to be asynchromoniously so it doesnt take up your attention, that is those words what Machine Learning is about. I can order on my cell phone while talking to you and playing a game and getting the scores of the even though a preseason game of the eagles beating tampa bay at once and sitting here and watching the olympics. Understood. Thats the world, david. You know how much bandwidth you need. You need nvidia chips, acacia to do the back stuff, hpe to be able to deliver the basically this huge data center of property. Data center machine learn understand what you want before you know it is whats moving. Only a couple companies playing, but those are the stocks leading this morning. We will talk more about that i think in the weeks, months and even years ahead if i can go that far. This what is were talking about. These guys are ahead of us right. Grand master chess players are we pawns . Yes. Lets get to retail earnings while we ponder that. Plenty to talk about. Jc penney not up to where revenues were. Samestore sales up 2. 2 . Still below estimates. Nordstrom, though, set for big gains after reporting profit of 67 cents a share, well above expectations. The Company Raised its guidance for the rest of the year. Start off with nordstrom, a nice bit, saw macys and kohls yesterday up sharply even though they had samestore sales declines at macys, people took the numbers and at kohls as well, better than had been anticipated. The stock is you. Kohls and nordstrom nonpromotional on the Conference Calls saying things are better. Our Loyalty Programs did better. We had the right merchandise. Both are going to come in clean to a backtoschool season. There will not be Promotional Price cut which we like. Nordstroms anniversary sale unlike what the hedge funds were telling me turned out to be strong. That anniversary sale difficult. Different time frame. Rack was very strong. Nordstrom was on the Conference Call i felt a little defensive saying listen, yeah, there are regular stores doing well but Nordstrom Rack is doing extremely well. You started thinking what happened in nordstrom the previous quarter. Maybe that was an overreaction down. These guys are fighting their way back in terms of off doing more service again and having better apps, better execution and loyalty. The theme of the decline of the mall is still real. Isnt it . I think that this was a quarter where what were going do is kind of look at the individual companies grasping at straws of how it happened, about the credit card. Ive been speaking to bankers in the last few weeks. A big increase in the number of in the number of charges on your credit card. The consumer feeling more confident because of jobs, because of hiring. Were caught in a political season. I dont mean to be political at all but the actual credit cards the amount of debt being taken on has since the great recession, come back. Increased. Thats whats best. When you get kohls, nordstroms, jc penney was better, i am in the going to go with jc penney wasnt that good, it was very good. Why do you hing it was very good . Allison has a road map. Look at the comp store guidance. I am looking at it. Comp going into the holiday season, he will be returning capital. Billion dollar ebitda in 2016. Hes doing aggressive in what im looking at the Consumer Spending using the charge card at nordstrom, jc penney, costco, the charge card is back. To carl in a second. It was interesting how much press macys got for the closure of the 100 stores. We talked about it yesterday but sort of i guess because were so close to it, but its a bigger story than that. It is because out there in the rest of the country. Remember our at comcast we talk where we work, our previous cfo used to talk about its not growth, not profit, we want profitable growth. Michael, who is now not with us mike runs a p e firm. Genius when it examines to explaining how Companies Make a lot of money. Macys had not embraced profitable growth. They had embraced profit. They are putting their money behind those stores were not money losing but they will put their stores behind the growth part of macys and thats why macys can get a higher multiple. Quite a good call. And blue america is doing well. They make most of their money iff, perfume. Highend perfume revenue is water. Charging a lot of money for water. I will keep that in mind. I dont really buy any. Au de toilette. I cant even say that. Lets get out to carl in rio who joins us after an exciting night of events at the olympics. Carl . Hey, just unbelievable, david. The story of u. S. Dominance in the pool, at the gym and the names were starting to become familiar with. Simone biles, simone manual, katie ledecky, nothing compares to phelps versus ryan lochte. The 200 individual medley, the throw down as nbc sports called it phelps wins for the fourth straight games, lochte in fifth. Phelps the fourth athlete ever to win the same individual event four times in a row. Question is, is this the showdown between phelps and lochte. We talked to lochte in the last hour and he basically said not so sure. He said he was retiring in 2012 and i said he was going to come back. And he did. So im definitely im saying hes going to come back for 2020. You think he will be in tokyo . I think he will be. If he is you will be too . If he is i will be there. Medal count looks good. U. S. 38, china 30, japan 22. A little margin of error there between us and the number two spot. Phelps does swim tonight in his final individual event. Thats going to be the 100 meter fly. Its been a relatively tough category for him up against chad le clos once again and the past few times he has won its been a slim margin. The total margin of victory has been 0. 28 of a second. I know you guys just got retail sales, guys, but were going to do a spot in the next half hour about retail here at the olympics as we go shopping for both you guys both you, jim and you david. Thats in the next few minutes. Carl, i have to tell you, im getting a read about latin america in the last in the last few weeks. I know this sounds it sounds a little insane. But im getting a more positive read. Argentina getting a positive read, colombia a positive read and hearing, yes, im going to say it, brazil is doing a little better. I know its all anecdotal. When youre around there, i heard you about soap and whatever, but is it really possible that brazil could make a comeback . I think people are starting to talk about positive gdp once again. I think back to earlier in the week when we talked to carlos ghosn of nissan who made his way around to dealers in rio who are arguing to him, consumers may not have availability of capital to buy a new car, for instance, but theyre expressing the willingness to buy and from where this economy was two years ago, thats a huge step. Thats big. It is. We will see you shortly. On the beach, kind of foggy. Theyre so exciting. It is. I mean the events last night were incredible. That 200 im the peak of swimming all four strokes, distance to a certain extent. I remember going to school and talking why did east germany beat us. There is no east germany. We know why they beat us. They were all on steroids. I mean the east germans womens east german swim team. They were kind of they were on i dont know. Im glad theres no more east germany and so are they. Is fox heading towards a settlement over the roger ailes controversy . The latest there. Another look at futures as we wrap up this week of trading. As you can see we are headed for a lower open. More squawk on the street live from post nine when we return. There it is. Italy and spain. Thank you. Oh, thank heavens. I feel better now, end my week calmly as you see. Largely european markets are down this morning. Back here on our shores, new developments for roger ailes and 21st century fox. Reports say the company anticipating settlements with some accusers, though not clear how many people the company would settle with but the number of women who say they were victims reportedly reaches into the double digits. Jim. Oh, geez. This hasnt really affected the stock that much although it is down since we first learned about it. The group is not that strong. But there is an argument to be made that as this piles up, and as management, perhaps, Senior Management at fox is forced to potentially confront the idea of cleaning house that you would have a change to the to some extent in terms of fox which is an engine for profitability, the fox network, at 21st century fox. This is a personality business an we know that they had tremendous earnings this quarter. The fox news. Could you just make a case based on the fact that it was a juggernaut, its hard to replace what is the most profitable form of journalism sp. It is. At this point james and lackland being thecochair with his father are not taukts change in the Conference Call in the way fox news is programmed or they approach it. Some say youre not going to gill the golden goose. Again the mounting potential evidence, paul weiss, of course, the law firm continues its investigation. Which, by the way, is a real investigation, despite what you read about in the papers. The question, does it mean they will be forced to remove other managers at fox and, therefore, again, would you over time see a change or potentially important talent leave . We dont know. Its an interesting story to watch. Especially also from a governance standpoint, and culture standpoint at the Larger Company itself. Right. Its harder for me because im an earnings per share guy and i just had liked the fox very much. That fox news the gross profits were fabulous. They were absolutely fabulous. I just dont know whether you can if we were talking about a major retailer who Stefan Larsson leaves old navy and goes to ralph lauren, thats a change. Why would we not think the Major Division of the major retailer if that guy left you dont think the product will be as good. It has to be as good under rogers ailes. Im not talking politics. Im talking performance. Up next jims mad dash as we count you down to the opening bell. Another look at futures. 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Ha seize the data get our best unlimited plan ever so you can stream and surf all you want. With unlimited data from at t all right. Its time for a mad dash on this friday as we head to the market open. A market, of course, that hit highs on all three averages yesterday. Thats why i wanted to pick nvidia to talk about, kind of what intel was in 1999. Its in all the sweet spots. Brian cra zan itch trying to get it to be in the sweet spots. Theyre in deep learning, selfdriving cars, theyre in highend gaming, theyre in data center and in Virtual Reality chips and every one of those lines, was well in advance of where people thought it would be and very big quarter to quarter. Not year. Quarter to quarter acceleration. Off and to the right. Every single business that theyre in, you cant you need their graphics processors in order to be able to have the best cars, the best games. Because you cant run at a speed that makes a grand theft auto look like its more than real. When you look at a game like nba 2 k and looks like an actual game. It does. Nvidia not that the software isnt fabulous for take two but it needs nvidia chips. This is an area that i urged intel to go into during the old days when i said listen, if you want to grow, go buy this company. But you know what, they just became a powerhouse on their own. Theyre in the highest if you buy a car, Internet Things for a highend german car is loaded with nvidia chips. Theres a lot lot of lot of nxp semi, the number one market share. Free scale with a lot of thats number one. Free scale was always big. But david, this was the most impressive of the semiconductor Conference Calls. It was really, really good. Its not up with twilo which was the best of the calls that had to do with software. Right. Other than acacia, disruptive telco equipment play where i feel you got to be if youre in thinsar, siena, if youre in infineon you have to be careful and read the acacia call because you will sell those stocks today. You like that acacia. Theyre very, very smart and have a silicon based very inexpensive loved by the chinese going to be adopted for 100 g the standard. These companies are very, very good, david. And the analog to 1999. So many are profitable, not i could mercle. These are run Companies Run by real Business People a