Transcripts For CNBC Squawk On The Street 20170510

Impact it will have on the rest of the president s economic agenda. Plus well talk about disneys earnings. Revenues though a bit weak and of course its all about espn and cord cutting. You want toer what what bob iger had to say about the quarter. The yelp shares getting hammered. Well dip through that quarter that is dragging the name down. Obviously the story of the morning is the firing of jim comey. The lleyton ohis leaf the latest on his leaving the office. Lets go to eamon javers this morning. Good morning. Were an hour and half away from President Trump meeting in the oval office with Sergey Lavrov in the oval office. That came one day after firing comey who was investigating if any Trump Associates were in collusion with the russians in that process. We just saw mr. Lavrov at the state department a few moments ago play that video for you. And i believe we have some sound here of mr. Lavrov is asked about the firing of mr. James comey. Does the comey firing cast a shadow over what youre kidding . Youre kidding. So a small joke there perhaps from mr. Lavrov. Heres how everything went down last evening. We had a letter from President Trump to fbi director comey. Heres what President Trump said to the fbi director while i greatly appreciate you informing me on three separate occasions that im not under investigation, i nevertheless concur with the judgment of the department of justice that youre not able to effectively lead the bureau. It is essential that we find new leadership for the fbi that restores public trust and confidence. Sarah huckabee sanders, the white house spokesperson was on msnbc this morning, defending the president s decision. Heres what she said. I think that we were at a place where the fbi has the reputation of this department has been under major scrutiny. Taken a big hit. We need to restore credibility back there. I think that has to come from the new leader. The president is awake and tweeting here at the white house this morning. Heres what he had say about this. James comey will be replaced by someone who will do a far better job bringing back the spirit and prestige of the fbi. Comey, the president goes on to say, lost the confidence of almost everyone in washington, republican and democrat alike when things calmed down, they will be thanking me. Democrats i can tell you are not thanking the president this morning. Theyre saying this is a historic overreach comparing it to the saturday night massacre during the watergate era. Some republicans have rallied to the president s support here. Others are distancing themselves from this decision this morning. Carl, back over to you. Eamon, youll be covering it for a while. Eamon javers in washington, d. C. We have an interesting challenge here because all of the arguments on the political spectrum are getting lots of air. What does it mean for the investments . Thank you for distinguishing that because i can talk about this saturday night massacre, i remember what happened. I can talk about whether its not like that. Value not added, okay . But i think whats important, the things that have to be addressed before tax reform, things that have to be addressed before repatriation. Things that have to be addressed before the you have gary cohn flushing out the single page. That is right. That is what we refer to as the tax plan from the white house. The single page. The single page. Right. Its the single page plan. Open to suggestions. Youve got you have to do a ten pager, you have a one page. The page had rate brackets but not income brackets for what it will apply to. But its incomplete. Which tends to mean you dont get credit for the class which is whats happening. I think we have to go back to the quarters. What it can does is it refocus you on what business is. If this market is not down today, its a side show there. I mean, i dont want it to be a side show. I take the constitution seriously like everybody else here, but if we dont go if gold doesnt spike today we wont talk about this stuff as crazy as it might be. I mean, well be talking about disney. Disney has already taken a bite out of this. Bob iger i thought hed get the break of a lifetime when comey was fired, right . Like, wow, thats it. Theyll talk about comey all morning. Like, hey, comey, hear about espn . Well, he has lot of time on his hands to watch espn. Although he may be one of the people who is not watching sportscenter as much either. Point blank. But in terms of the importance of pushing back this time line of what were grappling with when we get a plan from the white house and or they get to work with the house and the senate, as they say they already are. I interviewed secretary mnuchin last week. He said were already at it. That was part of the plan. I mean, its very hard to know how much the tumult in washington around the russian investigation, the firing of the fbi director, will affect that time line. Right. Right. But they tend not to be able they almost are like not dual or triple tracked. Take some vacation. The urgency there. You have some republicans who are joining in and being critical. You dont have any sort of a of a momentum for to repeal the Corporate Tax. I mean, meanwhile, you have the Health Care Plan out there. The democrats are now finally getting narrative together which it was a big break for the rich. I was surprised they didnt come with that immediately. Right. This does sort of handicap mcconnell as a parliamentariapa. Senators like sasse, like murkowski and corker, those are important votes. Theyre thinking of Something Else now. You can have the firing of sessions, but i mean, an old friend of mine from law school, he talked about this the saturday night massacre. Archibald cox, no one would fire him, that was a constitutional crisis. This a constitutional crisis, you know what . If it is, gold should be flying. The s p should be down a percentage and a half. But the democrats are if favor of a special prosecutor will be appointed. Where do i mean, this generates a lot of attention that is away from the economic agenda of the trump administration. Exactly exactly. Does it derail it in some way, does it delay, who knows . To your point is it more than a side show or is that what it is . I mean, the market seems not to be paying attention as much any longer to the president s tweets and a lot of the other things. Well, the tweets are i think you get inured to the situation with the tweets. You get its just you end up saying, listen, its i cant fathom it, so why dont we go back to nvidia and gaming. Its too hard for me to understand, so maybe we should talk about what whether yelp was sales deflect who can add anything to this . I went to law school, what does that tell you . Archibald cox was one of i many movers and my professors and he was fired. How about that . Would you like to appear later to opine . No, i want to talk about battle front 2 and hasbro and how theyll be impacted by the incredible slate of films. Because im not talking ago espn because i have well, i want to talk about it. That was a narrative i have giving you. Geez. I want to talk about espn. Im fascinated by it all. Well move on to disney. Well keep our eye on the president s meeting with lavrov today. Disney did post a better than expected number helped by Hollywood Box Office success. Investors though focussing on the decline in subs at the espn. The higher programming costs. Last night on closing bell iger expressed some optimism about espns future. We will be in a direct to consumer business for espn product. We hope to launch one on our bam tech platform before the end of the year. Were increasing apps significantly. Were running the business more efficiently so we actually are confident in espns future. So cable operating net down three is the Fourth Quarter in the row. But parks up 20. Studios up 21. I thought it was continuing to have the 40 to 60 basis points losses in espn. There was a very i felt convoluted maybe i defer to you, but notion of how we were going to be counting espn in the future. So maybe were looking at bam tech or online. I thought there was a sense you guys are obsessed about it and you are. Im going to sound like you, jim, im going to direct people to read the Conference Call because i think mr. Iger lays out a fairly rigorous thought process in terms of their approach here. I agree with that. Gives himself credit for thinking about it for years, we were the first a couple of years back to start to be candid with you about sub losses in the expanded basic bundle. We have been thinking about it a lot. And he does go through a lot of their strategy. You have to remember by the way when he refers to the direct consumer product, thats an espn branded product. Its not espn as you know it. They cant take that direct to consumer. They have the contracts with the distributors in place right now. He in fact said, listen, eventually, you know, there are no plans right now to deliver an espn product direct to consumer. To go direct with it. There are complications that it relates to the current relationships with distributors but hes thinking of all the things. There was an inevitability to it. Right. You have to put your provider in before you can get it. I think hes saying, listen, please think of new ways to examine this issue, rather than constantly going over the same territory. He also makes the point we are on all of the new over the top platforms. All of in other words, whether its sony view or the youtube or the hulu offering or sling or directv, they all include espn strangely enough. Interesting in a bernstein note they kind of wonder where are the skinny over the top Video Service bundles that dont include sports . Right. That could be so much cheaper. Right. That might be you know, the world is going a la carte in its own way. Were going to start to get different bundles that probably dont include sports. No. Youre right. Maybe a bunch of discovery channels or scripps or amc. A lot of Different Things for a lot of people at a lot of price points. This is only going one way. This quarter has shown cord cutting is picking up speed in terms of it occurring. People are not necessarily just going with one of these bundles. A lot of them are disconnecting entirely. Netflix, amazon, im done. I want to point out chris berman who is a great friend. His wife was killed in a car accident last night. My condolences to chris and his family. One of the great people. Wow. Horrible. I have to say it because chris has been a great friend and supporter of us and what we do. Espn has a story out this morning that his wife was killed in a twocar crash near connecticut. Teacher. 67 years old. Anyway i dont mean to i just feel no, we should point it out. A devastating tragedy. At the same time, jim, old school media, time today. With the 18 cent loss. The revenue miss, slashing the dividend from 19 cents to 4. Shows you the challenging of even storied brands like people and si. They think we print down 21 that is 54 circulation down 14 . You know, if you didnt know any better you think this is a wasting asset. Time had a chance to sell itself, but they couldnt seal the deal with meredith. They had the offer from Bronfman Group that they said that was too low. Some of the shareholders may not agree with that after seeing today. Coted by he had a good number. He had a good number. He had a good number. Somewhere in the low 20s. Yes. Boy should have taken avon is going away too. Cotys cover girl, looking yourself best is a continual thing. Ulta will go up on this. A big winner. Yeah. I have to tell you, this is one of the most incredible trends i have ever seen. You have to look great. I mean, look, we are underestimating as is the ceo as is the Goldman Sachs downgrade of allergen. It is about looking your best. Including the cool sculpt which were getting. This is a way to look fit you get thin without having to diet. Isnt that the ultimate . I guess so. You cant be too rich, you cant be too cool sculpt. Whats the word . Its a new device, the analysts at goldman downgrades cool sculpt. Cool sculpt. The downgrade doesnt take into fact that Brent Saunders is going to put this in. Botox, joouf adetermine. If you want me to look like you, john garfield, well, it will take a lot more than that. But its a start. Amen, baby. You look pretty good actually. Thank heavens for allergen. More on the fallout on the firing of james comey. A morning to forget for yelp. Stocks are down 20 plus percent on the guidance. Nine out of ten days now, the dow and the s p has had not had a move greater than 0. 2 . Back in a moment. Excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Shares of yelp getting slammed in the premarket. They missed on revenues, among the strugglings on the advertising front. Normally this is a name that does move on earnings but not always line this. No. Its always when youre looking for Silver Linings its difficult when the company on the Conference Call said were not happy with the numbers or what happened in the Fourth Quarter on sales productivity. A lot of the newer customers from a year ago did not reup. The emerging customers. The interesting thing and the hidden thing here, that the business is the home adviser like business did quite well. David, im going to turn to you and say why this stock is down i didnt get to discuss with you how powerful this home adviser story is. Its interesting you mention that it came up with aic and they did that deal and an important deal that sent their stock price up dramatically because they gave they gave value their own business within aic as they effectively ipo through the maneuver. Yeah. This was a landing remember him from the politico . If i were to short the stock, my instinct to cover. Not that he would want to sell to this home adviser, but i have to admit that the combination would be powerful. Dillers created a lot of power. Remember, expedia is a great play and they continually bought things including a company that was that was a Terrific Company that turned it into do you think thats a common dynamic, the back stops on the pandora names, the yelp names . It is. In terms of the back stops we havent gotten to abercrombie fitch. If youre shorting small retail, youre saying holy cow. I think the yelp it was a bad quarter. I say it because they say it. But at the same time, there is core work here. Unless you discover that google somehow has eviscerated them, i dont thinks the case, it did happen at one time, i think theres core value to yelp. I want to talk to mr. Yell perman. I was referring to the angies list, but i didnt say angies list. No one is going to hold you to it. I want to clear that up. Call the attorney general and clear that up. I guess we still have one of those. We do. We do. And we have an assistant, Rob Rosenstein. The name is Getting Better known today. Yeah. Wow. Well cover what jim said on aif and why its up 10 in the premarket and count down to the opening bell in a moment. microphone feedback listen up, heart disease. You too, unnecessary er visits. And hey, unmanaged depression, dont get too comfortable. Were talking to you, cost inefficiencies and data without insights. And fragmented care stop getting in the way of patient recovery and Pay Attention. Every single one of you is on our list. For those who wont rest until the world is healthier, neither will we. Optum. How well gets done. The power of the nasdaq market. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. At crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. So what else is new . Humm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. Were is getting over the hump here so its wednesday, time to dash a little bit. Well do nvidia. Nvidia is one of my long favorites. From when aldi told you, audi, this is the chip company the shorts have trying to hold this down. They reported a quarter thats one of the best quarters certainly one really one of the great quarters of this era. David, get used to the term. The term is moba moba Multiplayer Online arena. Esports which is moba is now as popular among the u. S. Male millennials as americas favorite pastime. How popular . More people will be gaming than people who watch hbo, netflix, espn and hulu altaught. So important. You need the nvidia chips. Activision is now another player in the sports. Electronic arts. My friend got that nailed. Keep an eye on that. Didnt he come yeah, leff has not been right. Leff. Yes. Who uses the chips . How about facebook and google and Lockheed Martin for reliable visual reality. How about ikea. 220 cars i mean, hes predicting that we dont have enough professional drivers so everyone has to use artificial intelligence. David, they finally they are in the big nintendo, you know, theyre in the nintendo machine. Wow. A thing of beauty. The Nintendo Switch is so hot. The hottest console on earth. Theyre the power behind it. Congratulations to jen sen wang. Hes the best ceo who no one promotes except for me. I told him id give him a shoutout. And you did. We have the opening bell less than five minutes away. Stay with us. Manage my portfolio. I trd since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. 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Talk to your advisor about a brighter financial future. The opening bell is brought to you by brighthouse financial. Established by metlife. Youre watching cnbcs squawk on the street. The opening bell in just about 90 seconds. The market paying attention to things out of washington as jim comey is fired. Were focused on the disney earnings and nvidia and tonight we get snap along with the Big Department stores. Snap has been hovering at this level. When you become public that First Quarter you probably have some good ad firms in there. It would be surprising. The big surprise, if they do not have is a blowout advertising number. They have a lot of different Quality Programming to go against advertising. And i think that they could produce a number that i think would make people recognize oh by the way that the group is undervalued. I want to switch back to twitter for a second. I mean, were all on twitter because the president is tweeting. I mean, he didnt fire i mean, anthony nodo would have been thrilled if the president had fired comey through twitter. Maybe thats why twitter is not up today . Could have used twitter. A much better way to distribute than a handwritten letter. Comey didnt know it was coming. Comey learned about it speaking to employees in l. A. Because it was on the tv. Thought it was a joke at first. Found out it was not. Heres the opening bell. The s p at the bottom of the screen. And the big board is celebrating five Point Holdings. Well talk with the ceo when the stock opens. Over at the nasdaq play works. A nonprofit providing supervised game sports in low income urban schools. So well see what disney does to the dow this morning, jim. Yeah. I want to come back to the bell ringer over at the nasdaq and this incredible east ports thing thats sweeping the thing. Ea, i didnt get to give ea the due. Electronic arts. But they have programs its really interesting. Everyone is making so much money off of disney they have got they have some disney thats this battle front 2 which is star wars, hasbro is making money off of disney with all of the different toys. Disneys not making money off of espn and obviously espn is very lucrative. Everybody whos connected with disney is doing fabulously. It makes me come back to the brands of disney which when the smoke clears the brands of disney will be worth a lot. And will go back to the parks because of the new rides. You keep revisiting and shanghai 10 million viewers. At a visitors. Yes. Visitors. In the next few days. 10 million. Its movie slate, we all go. So there will come a time its not yet that we will be focused on the espn going down a little. But maybe we wont be focused on the other ways we pay to get espn. And maybe they did get the costs down because of some of the personnel changes. But all im saying is that when i come back and listen to the Conference Calls, anything disney you want to affiliate with disney so badly. Keep that in mind. Thats an aspect when it goes down three iger did point out the 100 people who were dismissed at espn got a lot of attention and they have 8,000 employees to put it in some perspective. They have the unbelievable tech. Thats why bam tech has unbelievable capacity. I dont know if use the app or put the teams in. Lets go back to time. When we were growing up, you were trying to be in the faces in the crowd, you were trying to be in Sports Illustrated. Theres some great writers still with Sports Illustrated. Peter king. I look at the technology that espn put in and recognize thats what caused Sports Illustrated to go down. Too bullish . Well, time is really people. Thats all it is for the most part. People is the main ebitda generator at the company. It needs a complete rework. When you spoke to the potential buyers for the company that would admit as much. Some had bold plans and it did appear that meredith was very close but eventually i was told that merediths financing was not completely this was the opinion of at least of some of the advisers at time, not completely straight forward. They decided to go it alone. Im sure their shareholders wish they had chosen a different path if there was an opportunity to sell the company lets call it at 20 bucks a share. Back to disney, guys, i mean, your bam tech point. Iger did talk about this idea that were not going to do a one size fits all product in that marketplace when we go direct to consumers since we can really craft things that are individual. I love that. This is where the world is going. I love thats what im talking about. We can service to you through bam tech and the technology available. I like that as someone who is a philadelphia fan. I put in my stuff. It has all of my stuff come up. Theres a way to personalize that, thats the next wave. Nike would tell you thats the next wave, personalization. Would you be forgiving of any company that missed revenue five out of seven quarters. No, i wouldnt. Thats a great point. I think the brands are so amazing. Yes. Thats something maybe im taking my eye off the ball by saying that. By the way, media is getting crushed again. Vol can is doing much better than media. That for that. When we started in on the Conference Calls its not just the concerns of cord cutting but the advertising environment. Other than cbs saying some positive things generally speaking it hasnt been a particularly positive i wouldnt say its been negative i know thats not definitive. But talking about the upfronts. But some weakness in advertising. This continued concern about of course people who are just saying no more to the video bundle at all and not reupping with one of the other top platforms. Did you see viacom is flat on the year. It had been up over 40 at one point. Sell did you see that . Charter is putting their most popular offerings in the expensive gold tier. Thats what we learned on the Conference Call last week. Right. Thats what really pressured the stock price on that day in question when viacom started down dramatically. We still havent heard from fox. They havent reported yet. News corp well, its different. Everything down. Time warner didnt go down because its being acquired by at t. But they have seen their best times. But mean while, priceline is down a great deal today. This is i think an opportunity. I know that theres some people Moffett Nathanson who does great, great work is saying that the price competition is for real this time. Expedia is doing quite well. But i will point out that this is one that if you bought it on the dips, you have done incredibly well. But travel and leisure have been strong, media has been weak. Go back and forth on whats working, whats not working. Whats working, not working. For a names been hitting record highs, ea at 105 now. I know. A year ago today it was 64 bucks. Well, thats moba. What did that meant . Multiplayer online battle arena. This is e sports. This sells out so quickly. This is people watching other people play game. When you combine nvidia with the chips. Big consumer names. I think kraft i mean ea said listen, we dont need that money. Thats icing. Thats take two. You mentioned activision. This is the Fastest Growing actual secular trend in the country with just just watching its bad enough that you play it yourself. Watching others play video games. Talk about time on your hands. You mentioned nvidia with the chips in all of this. Ea benniefiting from it. If you want to play it i guess these are some of the ways. I want to watch people do it, i guess by the way, logitech has the board that you need to win e sports if youre trying to logitech stock has been driven by that. I missed that one. Do you let your kids do this . Do what . Be mesmerized by e sports as i think were a bit of an outlier in my family. A lot of video family. Its madden. Go outside and play. Its 2k, fifa. Thats it. Even better than watching fifa is to go play, but im old school. Im going to retire. Not a lot of that. But thats why im not as clued in to it. Okay. I did want to talk about tmobile and sprint and softbank reported its earnings. Masa son, who founded softbank, he went on the call or the conference to talk about various things including the vision fund. That enormous fund thats fairly close to closing thats making significant investments in well, all sorts of difference areas related to potentially machine learning, ai. And robotics. But he also did take the opportunity to talk about sprint which of course softbank controls and the prospect of a deal with tmobile. Our top choice remains tmobile. We will be open and sincere as we aim to launch negotiations. Were basically open to anything. If theres an opportunity that will lead to realignment under better conditions we will study it with open mind. If you remember, masa son joined the sprint call and he talked about the box and he was cut out and he couldnt share the thoughts on sprint then which he wanted to. So he came back on the softbank call and he was able to share them this time. The question though, guys, remains whether the department of justice would allow a deal and apparently theres no real engagement as of yet. The question is the germans what do they want to do . Theyre the larger company, tmobile and sprint, when you add in the debt at sprint theyre at similar sizes. But would the department of justice allow it . You know, at t was not allowed to buy tmobile. Right. Originally tmobile and sprint had thought of getting together and they were dissuaded from that even prior to announcing a deal a few years back. Why would that deal be allowed . I dont get it. Its one of the Core Principles is to have the working person pay less or the these things. No way that would necessarily lead to paying less. That level of concentration. I say too much magic box. Four going to three. Its the key part one of the key bills of your every month. One of the key bills that you have to pay. Away from the Apple Services thing, where i pay 24 to tim cook for doing something i need real bad. Whether or not it would get past the approval at doj, but the germans are thinking long and hard about as they listen to son saying come on. Come on. The waters good. Legere was making fun of something. He makes fun of so many people. Because its a day that ends in a y thats why. Dont you love that . Coty is up 11. Watching aaf. Hired some bankers to put itself on the block. Well, they have been a disaster. I dont know who would buy it, but theres a guy who would want to buy something. I would cover my short in case its for real. Coty, you have to look yourself look your best. Im not losing the moba theme. Ill talk about it tonight because theyre important. The shorts could not keep nvidia down. Social media one of the focuses of the nvidia call is how important data center is and data center is cloud. Its a big you know, i keep thinking about what green does saying. Diane green who runs the Cloud Business at google. So hot. Within five years theyll be bigger than amazon . Well, i dont know. We wondered what she was smoking. True. Reading these or eating these days. How do you like jensen wang saying on the nvidia call that everything has to be delivered and we dont have enough professional drivers so we have no choice but to go autonomous. A whole new theory. Wow. No choice. Pilots and drivers its getting serious. Everything needs to be delivered. Well, yes. Who doesnt have enough drivers . The world. We need drivers. We dont have enough drivers to do ecommerce. Thats what what she is saying. Move it to alibaba in china and theyre delivering 300 million packages. They were mentioned tens of millions of packages a day. Mentioned for jones mentioned for dominos pizza. I think the u. S. Navy has seen this for visual reality they have to go to nvidia. I hope nvidia is not giving it to the other army. Holy cow. This company is just it is i understand that intel had to buy mobile i. Otherwise theyll own the autonomous vehicle, including trucks. Very important. Because were not driving these things. We dont have enough people. What a story. Well, eventually it will put all the people who arent driving them out of work. This the last push. Right. If you want to look at it half empty, sure. Well, no, they need to be retrained to do Something Else. True. This is a call he called it the automation of automation. Which is something by the way that elon musk talks about, but hes not as eloquent. You dont need a hallucinatory drug or a tincture or marijuana chocolates to understand the Conference Call what you need by the way, i suggest i suggest xanax or even klonopin, if you want to listen to the elon musk call. Im going to do that. Im going to sit back and you give me whatever you think i need. Listen to the Conference Call. Maybe ill just go old school, but i dont need any new pharmaceuticals. Maybe only carrie in her worst moments can understand the Conference Call. Im going to listen to it. Quinn could make sense of the call. Dows down about 50 points. Half of that is disney. Lets get to bob pisani on the floor. Good morning. Looks like the market is taking klonopin because of the muted reaction to the whole controversy in washington. Lets look at the sectors. Energy a bit of a boost. Hopefully oil has a bottom around 45. Well see. Techs leading. Always been leading. Banks are a little weak because of the slight uptick in the ten year yield. No bill movements here. A lot of people are saying that the markets mispricing risk, i dont know. People yell at the stock market. I dont yell at the stock market. I think dan clifton over at strat agus had a good point, the comey story is a political story, not a market story. Thats the adult way to look at this right now. They go on to say, look, we have to watch business confidence. I agree with that. The inability to enact the agenda can move the needle in the wrong direction. Well watch the business confidence. Thats what matters. Meantime, were entering earnings season for the big retailers. Its isnt going to be a good one. You know whats been going on for the retailers. Its bouncing a little. Were up 7 in the s p. Big laggards. Take a look at these numbers. 22 will lose money. 61 will post lower year over year earnings and 46 will post lower year over year revenues. My friend at Retail Metrics kohl piles the numbers. Ken perkin said this could be the worst performance for the retailers since the great recession. Now there are retail leaders this year but the problem is that the whole market is dominated by amazon and to a lesser extent by walmart. Theyre up this year. Now, its not the only thing. We have been talking about how well to do it yourselfers are. Like lowes and theyre doing well. Ulta is doing well. But the rest of the group is generally not. Even the old discounters remember ross stores and tjx, they were darlings a year ago. So the Retail Leadership Group is getting very narrow. I struggle to describe how big amazon is. My favorite statistic and this is i think the best one i have come across in a single way is there was probably online sales grew maybe 50 billion in 2016. Retail Internet Retailer estimated amazon got 65 of the growth in online growth. And they got 27 of the growth in total retail sales including everybody else. Thats a remarkable statistic. That tells you how do you even exceed against Something Like that, thats what theyre facing right now. Listen for any other comments but i dont know how anybody can talk about their margins from one year now. Things are changing so fast. Still waiting for the comments starting tomorrow. Macys and kohls. Finally an ipo today. My old business, retail in the housing business, i grew up in the Home Building business. Five Point Holdings, its a lennar spinoff. 14. 50 to 16. 50. Well have the ceo here, in fact, from both companies theyll be here to talk about the housing business. Right now the dow very modest, down 46 points. Both of them here. Stu miller is here as well. Karl, back to you. Speaking of modest, modest impact from comey on the bonds today. Lets get to the pits, c me, Rick Santelli. Actually one trader said it. If individuals went to court and the gavel came down, thank god for double jeopardy. Whether its benghazi, whats going on with russia, a gavel needs to come down. People need to move on. Theres work to be done and the markets seem to see that and see past some of the political issues that never get resolved. If you look at the 24 hour dere were down a basis points or two. We did get up to the 241 level yesterday. Were hovering in the zone we basically traded five plus weeks ago. Lets look at the macro look at the market. Lets look at a two year chart of tens. A couple of things jump out at you. Those double tops around 260 are going to be formidable resistance levels. Many traders and technicians think thats very difficult to take those levels out. But should we that would be aggressive. Doesnt seem like it has the horsepower. We have a ten year note auction, 1 00 p. M. Eastern ill be covering it. Lets look at the short security, it looks the same. But on this chart here you have that 138 level high. Many traders say thats what you want to watch. Technically significant. Look if you look at bunds, theyre on a lower level, but lately they seem to move up and down, along with treasuries and other sovereigns. Finally, foreign exchange. 100s is what you need to Pay Attention to. If you open the chart up to february you can clearly see how that level jumps out at you. We closed at 102. 20 last year. Carl, david, jim, back to you. All right, rick, thank you very up many. When we come back an exclusive with the ceos of lennar and that real estate spinoff of five points. Making the debut this morning. Dow is down 53 points. Were back in a minute. In these turbulent times, do you focus on todays headwinds . Or plan for tomorrow . At kpmg, we believe success requires both. With our broad range of services and industry expertise, kpmg can help you anticipate tomorrow and deliver today. Kpmg. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. What we do every night is like something out of a strange dream. Except that the next morning it all makes sense. To power global ecommerce Fedex Networks are massive, farreaching and, yes. A little magical. Fedex. Com slash dream disney accounts for about half of the dows losses at the moment. Shares as you can see down about 3 . Taking you back to late january levels. Well get stop trading with jim in a moment. Hey. Pass please. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. Time for cramer and stop trading. Yeah. Matthew boss my favorite analyst at jpmorgan says because of the election disruption which we whether the trends being good, oil and gas markets being down, stock market up, dollar soars, cycle food stamps maybe be more positive on the earnings. I point out kohls, if it does screw up, buy more because it has a big buy back. Some think this is the worst in retail and there could be some rentals maybe nordstrom is a rental. But overall, dont get too negative on retail right now. I point out that anf makes it hard on retail. We have some oil working today. Thats good. I have a company that never does tv. Theyre a rigorous company. I have the real estate company, cbre and jack hartung, well find out if chipotle is back. They have done a magnificent job in trying to navigate a very difficult situation. Oh. Go rest. See you on the air in ten minutes. Well, holy cow. Mad money tonight, 6 00 p. M. Eastern time. When we return the latest on the president s firing of james comey. Where the trump agenda fits into the mix. And more reaction to disney and what you should do with that stock as its down 3 plus. Back in a moment. Whether its connecting one of the worlds most innovative campuses. Or bringing wifi to 65,000 fans. Businesses count on communication, and communication counts on centurylink. Good wednesday morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen and david faber at the new york stock exchange. The markets trying to assess the impact of jim comeys firing over at the fbi. Along with earnings from disney. Looking forward to snap and some retailers tonight. Oil is also working as we get some inventory numbers in 30 minutes. Our road map starts with fbi director james comey out after being dismissed by President Trump. Well get a live report from washington and hear from the former fbi assistant director straight ahead. Disney taking a hit over concerns about espns subs. Well hear what bob iger had to say about that and more. One of the nations largest Home Builders lennar spinning off the five Point Holdings. Going public right here at the nyse. Well talk to the ceos of both of the companies. President trump fired james comey, the white house cited his handling of the investigation into Hillary Clintons email server. Our Kayla Tausche is on capitol hill where Mitch Mcconnell and Chuck Schumer both spoke on that topic. As the white house moves to install the interim chief of the fbi, a bit of political theater unfolding where democrats all in their seats as Senate Majority leader Mitch Mcconnell took to the floor and he acknowledged them and he spoke about health care before discussing the firing of the fbi director and the calls for an independent investigation now into russia. Today well no doubt hear calls for a new investigation, which could only serve to impede the current work going done not only to discover what the russians may have done, but also to let this body and the National Security community develop countermeasures and more doctrine to see it doesnt happen again. This was the response of the Senate Minority leader Chuck Schumer. Listen. If there was ever a time when circumstances warranted a special prosecutor it is right now. Despite the fact that those were two very stark response from the head of each party in the senate theres bipartisan blur. Six republican senators have been critical of the decision or at least of the timing to fire the fbi director. When the president and the and what the department of justice did and noticeably richard burr said he found it troubling, the timing of the ousting of the fbi director. The question now is what this means for the confirmation of the new director of the fbi whomever the white house decides to choose. Because the senate will have to confirm that individual. And then theres the question of how much distraction this will provide congress with, how much time theyll need to spend on this very issue because at present each chamber only has a month in terms of the legislative days between now and the august recess. We still havent heard from many house members. The house is out of session this week. We havent heard from Speaker Paul Ryan whos making an appearance in ohio this afternoon to tout tax reform. We are told that hes not expected to address the fbi directors firing at that event, but of course, carl, that could change throughout the day. Kayla, appreciate that. Well come back to you later on today. Kayla tausche on an historic day. Joining us is former assistant director chris wecker and john carlin to talk about the effect on the market and more. Good morning to you both. Good morning. Chris, as far as stocks are concerned our issue appears to be whether or not this interferes with the long line of legislation that the market hopes gets implemented. Is that likely to be the case . Well, i dont think the fbi director has much impact. I mean, they provide some feedback and some input into the legislation. I dont think this is going to have any impact whatsoever on that. I think were talking more about the bandwidth that congress has to both pass laws regarding health care, tax cuts, but also weigh into this morass of whether or not to have a special prosecutor. All the u. S. Attorneys that have yet to be nominated. Yeah. I mean, i think that this is its a pretty drawn out process, the investigation is. I dont think thats any qui quick theres any quick end to the investigation. The same people that are doing the investigation now will do the investigation under a special prosecutor. So i just dont see i think it would be a fairly seamless handoff if it happens. The wrangling on the hill, yeah, that takes time. This is a problem that politics is involved in every aspect of this. So what do you think, john . Is the trump agenda delayed or dead in the water even . Well, i think this is important long term for markets as well, is that we need to be focused on what russia is trying to do. How they interfered with our election, our prior election. We need to learn what we can about exactly how they did that. What theyre trying to do to interfere with democratic elections that are occurring all throughout europe, including hacking into peoples systems. And focus on okay, we know that our intelligence professionalsty theyre coming back at us in 2020 and maybe as soon as 2018. So for that reason i hope that it moves to the top of the agenda in congress and elsewhere to ensure that one, we learn the lessons we need to learn about what they did, how they did it, and two, based on the lessons we prepare ourselves so that we dont see an attack that undermines the integrity of our election. Our democratic system is why our markets are so strong. So it sounds like what youre saying is they should use the what did kayla say, 30 days theyve got before the august recess of the legislative calendar to focus on russia and not health care and tax reform . Look, im not a politician on senate, but in addition to whatever else they focus on top of their agenda should be focussing on protecting our country from russian attacks on our democratic institutions. And that includes making sure we send a signal to the great folks that chris and i have worked with at the fbi and at the justice department, the career investigators and prosecutors that we got your back. We want you to follow the facts where they lead. We understand why this is important to our country and has nothing to do with party. Chris, does comeys departure put a premature end to that investigation . Absolutely not. The investigation will go forward. Its a fully predicated investigation. That we know from former directors testimony. I think the agents in the trenches, to them it doesnt matter who the actual director is. Theyre going to move forward very, very aggressively and do what they do every day. Theyre professionals. The way this was handled, obviously, no surrogates in line. Although i guess well see some interviews take place not too long from now. But comey clearly unaware. What impact does that have on the rank and file who are responsible for carrying out investigations like this . I think it makes it puts a premium on doing a couple things. One, for those handling the investigation, we need to send clear signals through the leadership of the department of justice. Through our leaders, republican and democrat on the hill that we expect you to do your job because i bet there are some question marks given the timing as to whether or not theres something they did that causes the firing of the fbi director. So lets send that signal loud and clear. Know Everyone Wants you to do your jobs. Secondly, when it comes to who the next nominee is for the fbi director i think it makes it vitally important that whoever that is, that theres not a whiff of partisanship to their background. That its someone who can be trusted by both parties. Lets remember in addition to the investigation as to what russia wants to do to undermine our democratic institution, the fbi is in charge of some other important investigations ranging from terrorists who are actively planning to do attacks inside the u. S. To our most sensitive and public Corruption Cases thats why its so important whoever the nominee is it sends a signal that the premiere Law Enforcement institution in the world is going to continue its mantle of being a nonpartisan institution. Comeys former boss tweeted this morning, i would not feel good about myself if i did not make clear i have come to know and admire comey as a hero and he will sacrifice his own wellbeing for he operates in a low principled environment. A Statement Like that, while the president says he had lost the faith of both parties in washington, whats true . Well, what is true is that i know director comey. He is a man of integrity. He served many years as a prosecutor, been very effective. Always followed his conscience. I think what happened is his ego may have gotten the best of him. In stepping out of normal procedures we all know if he served in the in either the department of justice or fbi, that prosecutors make prosecute decisions and agents investigate. Thats very well set out in regulations and policies. So when you start making value judgments and inserting yourself into the organization thats bigger than one person, i think thats where the mistake is made. Hes a man of integrity. No question about that. Chris john, day one of obviously this story well cover for a while i have a feeling. Good to see you. Thank you very much, john carlin and chris swerker. You may have heard the bell, five Point Holdings is up 7. 5 . They manages lennars California Master plan developments. The ceo Stuart Miller and emile haddad will join us in a moment. Yeah, theyre up 20 so far this year. Well talk about and the outlook ahead. This is play on california realess tats. Meantime, looking at the overall markets, the stocks are fairly muted after the abrupt filing of james comey. The market moves, guys, are pretty much on par from what we are seeing in the past few sessions. This low volatility, small kind of move. I think its also important to check whats going on with the u. S. Dollar. There are all sorts of questions today about the unpredictability of the u. S. Government. If you really saw concern about the fate of the government, about a constitutional crisis, you would see it in the currency market. So the dollar did dip a little bit last night when some of these headlines crossed. For instance from the dollar versus the yen its recouped most of its overnight losses. Treasury is another place that you would look. The safe haven u. S. Government debt. Theres buying, theres no panic or mass bullying of some of the government debt. You are seeing yields lower. 237 is a yield on the ten year. Which guys makes you wonder. Whether there is a market implication for this story. Whether tax reform to begin with was priced in and that being on the back burner now is not having an impact or whether the market still thinks it will still get done. You know, our market has been kwai yes, sirrent every day and so many of the stock markets you may look to, based on the geopolitical events and with the event yesterday of the firing of comey. I dont know, sara. I think a lot of people are trying to figure that out and wonder if its simply not effectively reflecting the reality or perhaps appropriately saying this is sort of this is not important to the overall performance. Certainly of equities as it relates to the underlying performance of the businesses that make up our stock market. And the question is whether theyre underpricing some of the risks from washington, the unpredictability. The risk of not getting the pro growth agenda done that the market was so excited about. Whether the good earnings and the better Economic Data overseas that we have been talking about so much, the fact that Central Banks are still in easy mode around the world are just sort of making things better in the background and the focus is not on washington with some of the risks. As jim said yesterday, put it in an index fund, right . Id be watching gold also. A little bit more than some bid for safety. Nothing extreme. Well keep an eye on it throughout the day. Disney shares are getting hit as high programming costs at espn weigh on the cable segment. Well dig through the numbers and hear what bob iger had to say to cnbc. And disney is one of the reasons that the dow is underperforming, but the s p and nasdaq is unchanged. The nasdaq coming off of another record high closing. Squawk on the street will be right back. Disney reported earnings ahead of the street estimates but revenue was below the forecasts and investors are concerned about the loss of subscribers at espn along with its higher programming costs. Our Julia Boorstin spoke with bob iger and she joins us now with more. Julia . Thanks, david. That thats right. Iger said that disney is confident that new digital revenue from espns inclusion in new bundles among other things will compensate for traditional tv declines. We will in a direct to consumer business for espn product. We hope to launch one on our bam tech platform before the end of the year. Were increasing engagement with our apps significantly. That comes not only more brand affinity but brand advertising so were running more efficie efficiently. We are confident in the future. With iger serving on the Economic Advisory council i asked what his agenda is with the president. He said he hasnt attended a meeting with him yet and he will. And hell vodz for advocacy for Corporate Tax reform. I asked him if hes interested in running for president when his contract expires in 2019. I have had one of the greatest jobs in the world i believe for the last 12 years. Itch a few years left. We just talked about that. I have a lot to do here still and i want to make sure this company is set up for the future. Im not spending much time thinking about what im going to do next. But he didnt exactly say no. In the meantime, iger says hes focused on continuing to grow the business with new pandora and star wars parks attractions in the works and the park hitting 10,000 visitors faster than expected. Thank you very much. Lets bring in todd younger from bernstein. Todd, you know, obviously continued concern about sub losses at espn, higher programming costs. Whats your overall take though on the quarter . So, start with the fact that disney the a diversified global company, having Great Success at the box office, the parks continue to perform at the highest margins on record. So things are going well. Obviously, the market is more concerned about whats going on in the tv business. Where disney confirmed what anybody paying attention to the already know. Which is they continue to lose subscribers to the overall pay tv universe and at a slightly faster rate. Disney put a nail in that and then really confirmed that. And then advertising on demand side has clearly softened with a it was a negative year over year for disney and other companies this quarter. The crux of that whole problem for disney i would say is this. Their biggest Television Brand is espn. Espn is extraordinarily powerful brand for all of those people out there and there are lots who care about sports. But the fact is not everybody cares about sports and we think theres tens of millions of households who for a variety of reasons are still paying today for espn who really dont want the product. And we dont think theres anything they can disney can do to compel those type of people to keep paying for espn over time. And you point out though interestingly in your note on this this morning, todd, the ott packages that have been put out is there and mr. Iger made a point in the Conference Call all include espn interestingly, when one would anticipate giving your assertion that many people dont care about sports, you can come in at a lower price point if you didnt include espn in some of these bundles which we havent seen yet. Yeah, its somewhat comical in a way. I think the whole idea one would think of the supposedly lower priced, more specific over the top packages that will give consumers a lot more flexibility. One would think that you would see all sorts of varieties of the types of packages, offering Different Things for consumers. Strangely enough, so whats launched all kind of looks the same. They kind of have the big groups of networks in them. They have the big sports net works in them. And by the way so far they dont seem to be doing much of anything we can see to bring incremental paying subscribers into this system. Sure yeah, many of them seem not to be subscribing to the over the top platforms. Quickly on broad media, on the stocks are down. Disney perhaps one of the best positioned given the strength of the studio, the strength of the theme parks. Is this a seminal moment for media given the increase in cord cutting that we have seen . We have seen a couple of potential seminal moments in just the past 18, 24 months in media. Im sure you remember it was 18 months ago the fall of 2015, we had a similar period of time when media stocks this seems like another one of those times. I would characterize whats gone on with media stocks the past couple of weeks as more of a more of a return to normalcy from what i would have characterized as a false rally. They had underperformed the market, all of them for the past two calendar years post the elections. They started going up and outperforming the market on things like expected tax reform, m a and things like that. But nothing fundamental. I think what we have got in this quarter is that the fundamentals are getting worse. We have given up all of those excess returns that we have grown up since november. Were back where we started from. I think its a round trip really. Well, todd, i appreciate your insights this morning. Thank you. My player. Todd junger from bernstein. The spinoff of lennar is going public this morning. Well talk to the ceos of both companies with the dow down 54. Clouds cant connect . R michael, can we get this data to. . Look at me. Look at me. Look at me. You used to be the yes guy. What happened to that guy . Legacy technology can handcuff any company. But yes is here. So, youre saying we can cut delivery time . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. An ipo this morning here at the nyse, five Point Holdings going public. Its a spinoff of home builder lennar. Five point is the largeest owner of mixed use master plan communities in coastal california. The stock is up 9. 5 . Joining us in the cnbc exclusive, emile haddad the ceo of five Point Holdings and lennars ceo, stu miller. Good morning and congratulations. So emile, talk about the process. You filed to go public back in 2015. You pulled the trigger today. It did price below the expected range of about 18 to 20 but got a nice pop at the opening. We were ready to go, the market wasnt open for the ipos and we waited until the market opened. Here we are. We are very excited to be a Public Company now. You still are going to hold a big stake in voting interest. We have been working on this strategy which is building master plan communities now for about 20 years. The opportunity to bring it public is really very exciting. We opened below the range, but its not about where you start, but how you proceed and how you grow along the way and were really excited about it. Being characterized as a statement of confidence, even as theres all these worries about retail and commercial real estate and softening prices in the bay area. How does that fit in the larger story . Well, remember, around the residential side of this business youre looking at supply constraint and california is ground zero for supply constraint. Demand continues to grow. The job market is strong. Especially in these markets in california. Its a great time to be a residential builder. On the commercial side, this strategy has a blank sheet of paper on 21 million square feet of commercial space. That means were not locked into yesterdays obsolescence, so as a Master Plan Community strategy we have a unique strategy. Do you fill vacancies than you did in 20 years . Whether its office space and especially retail, tomorrows retail is going to look very different than yesterdays enclosed malls. Its much more about entertainment and lifestyle and were enthusiastic about the way that the retail and the commercial revolves. Can you walk us through the portfolio, how much is in the bay area, how much is residential versus commercial. Sure. We are basically 40,000 home sides and 21 million square feet is the total. In the guy bay area we have 1. 1 million square feet of commercial. And then in Orange County we have 9500 home sides and 4. 9 million square feet of commercial. We are only in these markets. Mr. Haddad our real estate reporter diana olick sent in a question about china, which is an important source of the buyers for what you talked about in california. Theres a question about the chinese getting their country out of the market to buy the homes is that a concern for you . No, were getting the buyers in irvine will 40 are asians. The household formation is happening out of the community and when the son or the daughter wants to buy a home, the parents are helping them so the grandchildren can stay around. Its out of the Asian Community that already exists. So its more a domestic source very much so. As opposed to it crossing the borders to come from china very much so. Im wondering how the trump tax proposal is going to affect the real estate. California has among the highest state income taxes. Isnt that a risk to the Housing Market there, that people will leave . Look, its too early to figure out what the tax bill if it comes along, when it comes along is actually going to look like. Everybody is kind of speculating. The configuration is going to impact people. Its going to impact people and their buying decisions but remember california is a place where people want to work. People want to live. And so while there have been numerous legislative initiatives that have called in to question californias future, year in and year out, california has continued to grow as a desirable place for people to live. Demand continues to grow. How about labor supply . Were looking at wages, trying to creep up. If infrastructure happens are there enough electricians and contractors and cement workers, masons . Its a big question around the Home Building industry. We have been talking about labor constraint for quite a number of years now. But were starting to see people come back to the Housing Market as labor. Having been displaced in the crisis. Having been displaced. Having gone to the oil patch or other places. Wages are moving up within the industry. That always attracts people back. I think well be okay. Well be able to continue to grow. How much of your business is driven by technology and the boon we have seen in Silicon Valley . Maybe emile, you can take that. A lot of it. Well, San Francisco is a very diversified industry. Its not only technology, but a lot of the technology right now is driving our business. I have taxes on my mind. Im wondering, if theres a repatriation all of those companies that are based there, microsoft and oracle and apple have so much cash overseas, im just wondering if any of that benefit the local communities in housing if it is allowed to be brought over at a lower tax rate. California continues to grow. It continues to be a dominant driver of the economy in the united states. Legislative waves will go one way or the other. And were going to see money being repatriated as part of a tax plan. Were going to see taxes be deductible or not as part of a tax plan and there are a lot of moving parts and california is going to remain strong. This is a pure play california strategy that were very excited about. Finally, as you now as a public currency are you going to use it to fund public developments . This whole capital raises goes for helping infrastructure and building improvements. None of it is paying anybody back. And you know as you think about the bill ackman did a long piece yes, we know about that. I know you do. But five point is a california version of exactly that strategy. At an earlier stage. Were pretty excited about the way that was articulated. Might be other questions about it. But nonetheless, we think that five points really ready to. Well, well watch. Thank you for joining us to talk about. Emile haddad and stu. Lets get over to sue herera. All right. Good morning, everybody. Heres whats happening at this hour. Secretary of state Rex Tillerson meeting with Russian Foreign minister Sergey Lavrov at the state department. House Minority Leader Nancy Pelosi meeting with the dalai lama in india. She accused china of crushing the tibetan calls for autonomy. It is likely to irritate beijing which continues the dalai lama to be a dangerous separatist. Video surfacing of yet another airline incident. Take a look at that fight that broke out on a Southwest Airlines flight when it landed in l. A. On sunday. It an apparently began when a man turned around in his seat during the flight and made a comment about the woman sitting behind him, quote, messing with his chair, end quote. And the retail competition heating up once again. Amazon is firing back on walmart on Free Shipping. They have developed the Free Shipping minimum requirement to 20 bucks. Earlier this year, walmart rolled out free two day shipping for orders of 35 or more. Youre up to date. Thats the news update. Now over to jackie deangelis. Good morning. Sue, you can see the oil prices are spiking on the back of the department of energy report. We had a big draw down on the crude. The smaller draw down on gasoline, but up over a dollar at this point. This is the kind of draw down finally in line with the seasonal trends. The market is getting more confident that people will hit the road and the demand will be there. Its interesting because in a week were still down 2. 25 . So you have some room to run here. And it looks like this could potentially be the start of it. Right now, dradzing just under trading just under 47 a barrel. Back over to you. Thank you very much. When we come back, a lot more on the political fallout over the firing of fbi director james comey. Well go live to the white house. Apples now down a full percent. And the dow is down 60. President trump meeting with russias foreign minister Sergey Lavrov, this comes against the back drop of comey being fired. Eamon javers has more. We believe that that meeting with lavrov is happening now inside the oval office here at the white house. Lavrov arrived at 10 after 10 00, 20 minutes in advance of the scheduled meeting. There you see him getting out of the car. We are not going to see any pictures of this meeting, however. The white house not opening this meeting up to press saying that lavrov is not a head of state, so therefore, he doesnt get that kind of treatment. But its also true that the visual of the president meeting with the Russian Foreign minister the day after firing the fbi director would not be a good optical visual politically for this white house. We are not expecting at this point to see or hear from the president of the united states. This is his only event on his public schedule today. We are not expecting to see him on camera at all. We are however expecting to hear from mr. Lavrov who has scheduled a press conference for 11 30 this morning at the Russian Embassy over in wisconsin avenue here in washington, d. C. Meanwhile, i can also tell you that a source familiar with events says to me that officials are meeting with candidates to lead the fbi today. They hope to have an fbi director nominee announced at some point in the coming days. Well see when that happens. No indication now, carl, of who exactly is being considered but so much attention focused on who the president will pick to succeed comey at the fbi. Eamon javers, thank you for that. What does the comey firing say about the president s leadership style . Joining us is jeffrey sonnenfeld, dean for the leadership studies for yale school of management. Good to have you back, sir. Thanks, carl. Good to be here. So all the terms being thrown around, nixonian, constitutional crisis. And yet, others argue draining the swamp. What does it tell us . Well, you know, ever since last night at dinner time, every Single Person has said everything that could be said and yet theres still more to say on this. And that is they have to go on tomorrow. How do they try to mop this up . I have talked to all of the leading Crisis Management and pr people. Nobody has a good idea. They have to have to figure out how do you make sense of the process and the timing . As you said with the foreign minister lavrov or maybe kislyak will parachute in too. Wheres the sense of urgency behind this, its confusing. Your question is what do we know about the President Trump that comes through in this . One thing we know he has a hair trigger sensitivity to criticism and we saw more of that come through this past week with the testimony in the senate. Secondly, we know he values loyalty. We didnt see that comey as he sees his subordinate would loyal to him, despite the independence and hes his own mouthpiece and person. These have been assets on many occasions but this is the doubleedged sword, the downside. You focus on management in part at large companies. I mean, to the extent that the president is the ceo, the chief executive, what kind of grades do you give him on the management they have put forth. Not necessarily the comey episode if you want to call it that, but just over the last 110 days. Execution is a problem. Its the old cliche about new brooms sweeping clean. Its actually only a part of that rastafarian motto. The whole motto is new brooms sweep clean but old brooms know the corners. Thats something that has to do with being careful and cautious. It doesnt come through here so the proverb is often misquoted. Theres no sense of urgency here. Why do many of the things have to follow so quickly . Comey of himself was caught very much by surprise. S he was in california as we all know, instead of where the security chief went to deliver the message at the fbi headquarters and comey couldnt think of a good quip. The former president of the berkeley, during the Free Speech Movement when he was fired by surprise, he said i leave here much the same way i come fired at his enthusiasm. He was so caught by surprise. I give a bad grade on execution on this. So we have seen the ceo, the president invite fellow ceos to the white house for a number of meetings, for counsel on various subjects. Do these kind of scandals make it harder for them, put them in an awkward position . Theyre there to talk about their business and talk about tax reform. And i wonder at what point they have to address this. They have to address it. I could be wrong and naive on this. The likely trump and kushner financial entanglement are way overstated. I think President Trumps loyalty complicates it. I myself without any data believe that Paul Manafort and roger stone and carter page, these flynn was there from the beginning which complicates it. But the others, there for their own i told truth this about a couple of months ago, personally. That a lot of these people came on in the 11th or 12th hour and they have their own interests, and not necessarily aligned with the nation. This is within the president s rights and powers to let go the fbi director. Youre not arguing this is a crisis, is it . People are calling it a constitutional crisis, youre right, he has the power to do it. There has to be an independent investigation so now there obviously much stronger calls for a special prosecutor to see the independence. And for example when the white house went so far to try to explain yesterday afternoon that this was based on the mishandling of the Clinton Administration and then he himself inserts the three times thank you, by the way, never thanking comey for his lifetime of government service, as many people had admired the many good things he had done, he was dismissed like sally yates and preet bharara. He said, i thank the three times you said i was cleared of any investigation on russia. Theyre going to do mopup, maybe it wasnt through direct context, maybe it was through reince priebus, but thats where it creates a crisis. It wasnt necessarily there. Why to do the timing now, if he had lost credibility maybe so. And of course everybody wanted to know why he wasnt terminated before. This is his management style, isnt its . Shouldnt we expect this is the way it goes for the next three plus years . Well, there are some yes. There are some democratic congressman who thinks this crisis is intentionally created to draw our attention away from damaging testimony this week. But of course that doesnt work anymore. I dont think hes getting that feedback. I think Jared Kushner will be giving him this feed back and ivanka. Kushner, you know, kushner is probably telling him this stuff doesnt work. Its backlashing on to him that theres an independent investigation or a very tough selection. And this guy, Rob Rosenstein who was an obama appointee, now the acting director of the fbi or rather, the acting Deputy Attorney general through all this is well thought of. But similarly, the acting fbi director is somebody with a come my kated complicated political history. This doesnt work out well for them. It puts out a bad spotlight on them. In terms of how they go on, as you can see sean spicer is not brought out. Somebody else is brought out. He does have Naval Reserve duty today. Handle the do you think it will be giuliani or do you think it will be Chris Christie . Apparently giuliani said it will not be him. It could be Chris Christie. Well see what happens in the days to come. Good to see you. Thank you for the invitation. As we head to break, look at shares of yelp. The Online Review site operator getting crushed today after reporting earnings last night. Yelp saying its lower than expected Revenue Growth shows few signs of picking up this year. The stock is down nearly 19 . Much more squawk on the street when we come right back. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Is apple the easiest bet in the market right you . Thats what one trader says. Find out how hes playing it on tradingnation. Cnbc. Com. More squawk on the street coming up. Lets get over to Rick Santelli at the cme group for the santelli exchange. Good morning. Good morning, and thank you, sara. Id like to welcome my special guest, dr. Judy shelton. Being a trump adviser, economic adviser, but also codirector of sound money project, youre very qualified to answer the first question thats for sure. At the Hoover Institution at stanford this week, stan fischer, vice chair of the fed, really knocked down the notion that there should be rules and a rule based fed. Hes offered discretion. Your thoughts. I cant imagine anything more important than having a unit of account and a store of value for someone to say the value should be seubject to discretio of fallible individuals shows a little bit of hubris. Being an adviser for the president , is their a path to bring more rules to the fed. Is it something that can be tackled in your opinion . Well, i must say, i just served on the Transition Team and i was part of the Landing Group assigned to the treasury. I wont quacall myself someone is whispering in the president s ear. The treasury is not responsible in the same way the Federal Reserve would be for establishing rates. They concentrate more on exchange rates. It is clear that if we are to have a sound money basis for trade ordo me domestically so p can plan, you want to minimize the distortions and artificiality. What i think the trump wanted was a sense of monetary integrity. They rebelled against a false economy induced through quantitative easing and excessively low interest rates. All those distortions alter investment decisions. It wasnt a matter of saying, what smu thould the rule be. I had some ideas myself. I think there is a sense that under trump, the goal would be to get back to reconnecting Monetary Policy to the real economy. Excellent, dr. Shelton. Very interesting. It is very nice to talk to you. I would like to have you back to talk about other issues like foreign ex quhachange and float rates. I know the sound money project you are codirector of has some significant thoughts in that arena as well. Thank you again. Now, we are going to go back to david. My pleasure. Thank you, Rick Santelli. Lets sent it over to john fortt to give us an idea of whats coming up on squawk alley. We have service now ceo, john donahoe, former ceo of ebay will join us to talk about developments in the quloud. We are continuing to follow disney ern disney earnings in the fallout from the slowdown at espn. How are the gross stocks doing . All that and more coming up on squawk alley. I count on my dell Small Business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. A 10speed directshift 5. 0transmission. Ine. A meticulously crafted interior. All of these are feats of engineering. Combining them with nearperfect weight distribution. Is a feat of amazing. Experience the firstever 471horsepower lexus lc 500 or the multistage hybrid lc 500h. Experience amazing. Taking a look at the markets. Dow down about 38 points. A big chunk is disney, cisco and apple, also lower. The s p and nasdaq, a little change. The nasdaq down about. 25. 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Com and get up to six hundred dollars. So beautiful. What shall we call you . Tom name it tom studies show that toms have the highest average earning potential over their professional lifetime. See . Uh, its a girl. Congratulations two of my girls are toms. I work for ally, finances are my thing. You know, im gonna go give birth real quick and then well talk, ok . Nice baby. Lets go. Here comes tom 5 nothing, stops us from doing right by our customers. Ally. Do it right. Whoo look out. Welcome back to squawk on the street. Im dominic chu. Stocks posting moderate losses. Half of the sectors green. Half in the red. Energy and real estate, the bestperforming s p 500 sectors in early trading while health care and Consumer Discretionary are the biggest lagers. One stock weighing on health care,aller beg care, allergan, the sector the worst performer week to date. Still positive for the month and up about 9 year to date. One sector to watch for sure overall. As we talk about the idea that markets are girating, lack of volatility. Technology, financials, key to watch along with health care. The three biggest in the s p 500. That does it for this hour of squawk on the street. Lets send it back downtown for the start of squawk alley. Back over to you guys. Got to look for metrics of volatility somewhere. It is 8 00 a. M. At disney headquarters in burbank and 11 00 a. M. On wall street and squawk alley is live. Good wednesday morning. Welcome to squawk alley. A lot to watch today. Disney, oil snapped tonight. The top story is the president firing fbi director,