Good morning its thursday. We have another jam packed show for you. Lets kick things off with a look at the European Equity markets. We are fairly even steven. We are looking at a 0. 1 decline for the stoxx 600 this morning weve lost a bit of steam in todays trading session after three days of gains. Lets look at the european markets one by one the ftse mib in italy hanging on to some marginal gains elsewhere, the xetra dax, cac cac seeing small declines. We have plenty of data out today in the form of july retail sales, eurozone inflation and the ecb minutes. When it comes to the sectors, were seeing once again basic resources leading the charge up 0. 6 , this comes on the back of strong gains in that sector yesterday on the back of chinese construction spending. Today metal prices are flying once again lets come back to the big story of the day and of the week President Trumps two big Business Councils have been disba disbanded. The bosses of some of the top u. S. Corporates decided together to end their associations prompting trump to bow to pressure and pull the plug several executives and labor leaders already left to trumps response to the violence in charlottesville. The White House Press conference where trump stuck to his both sides rhetoric was the last straw for members. Kristen welker has more on how the councils fell apart. Reporter facing a fullscale rebellion by the very ceos he once called colleagues, President Trump announced on twitter today hes disbanding two of his advisory Business Councils rather than putting pressure on the businesspeople of the Manufacturing Council and strategy and policy forum, i am ending both. Thank you all. The president trying to get ahead of a mass exodus from both councils eight of the Business Leaders previously announced they were out because of the president s reaction to charlottesville after mr. Trump again equated White Supremacists with counterprotesters yesterday. Not all of those people were neonazis, believe me. Reporter the latest upheaval began this morning after Conference Call with members of the strategy and policy forum which resulted in a decision to disband. They then called the white house with the news. The president dumping those Business Leaders publicly before they had the chance to announce the decision the ceos releasing their own statement today. Intolerance, racism and violence have absolutely no place in this country. Jpmorgan Ceo Jamie Dimon writing, its a leaders role in business or government to bring people together, not tear them apart. The nations top labor leader, richard trumka, also lashing out. We believed that the symbolism of being associated with that spirited defense of racism and bigotry was just unacceptable. Reporter its a punch in the gut to mr. Trump, a billionaire former ceo who ran as the jobs president. He needed Corporate America to back his claims that he was a businessman president who could get things done with their help. Now they have turned their backs on him reporter the president s surrogates largely silent. The Vice President rushing to his defense. What happened in charlottesville was a tragedy, and the president has been clear on this tragedy and so have i. Reporter both former bush president s saying, in a rare joint statement, america must always reject racial bigotry, antisemitism and hatred in all forms. Pathetic, isnt it . Just pathetic. The president of the United States needs to condemn these kind of hate groups. Reporter a cascade of criticism that could further stall the president s agenda. I think the entire legislative agenda is imperiled by calamities that are all of that was Kristen Welker reporting. Tim cook has become the latest Business Leader to criticize trumps response to the violence in virginia. In an email to employees, he called the events repulsive and said his firm would donate 2 million to help counter hate groups lets talk to our panel of guests rolof solomon and rika disenta join me around the desk. We heard in the report from washington that this is probably going to stall the reform agenda of donald trump. So far we have to the seen much. Not even healthcare what about tax reform do you think that will happen . Lets be clear. This is a moral issue a political mess, but we dont think it will change anything in terms of economic fundamentals the agenda will be postponed, but i dont think a lot of investors were kind of expecting anything anymore the glass was no longer half full expectations are low but frankly it doesnt really change the story thats a sanguine view. I think at the start of the year everyone was banking on, you know, deregulation in the Financial Sector on that big tax reform and Infrastructure Spending we were expecting 3 to 4 gdp figures. I feel like the narrative has changed. That was at the beginning of the year since the beginning of the year the market has given up hope on that weve seen that reflected in the dollar the dollar suffered quite a bit from all the chaos thats happening in the white house equities not so much i know youre a fixed income person, but treasuries, too, yields have been under pressure quite a bit. Why has that been reflected more in the fx and income space rather than equity space weve seen the dollar react to recent comments and events coming out of the administration, politics in the United States. But what were seeing in the fx space is its a broader picture than u. S. Politics were no longer seeing that divergent Monetary Policy on a global basis so no longer is it a story of the fed hiking and global Central Banks easing but more of a convergence from Central Banks around the world thats impacting the dollar. Well come to the fed in a bit. We got the fed minutes last night. Well talk about that. When it comes to the dollar, do you think much of this is down to the lack of inflation pressure or to the lack of reform progress on the part of the white house . We think the dollars recent moves have been more related to whats going on in the white house than it has been in terms of what well see from a Monetary Policy perspective. Thats on the dollar side. If we think about the rate space, our key focus there is the fact that markets seem to be underpricing the likelihood that we could see rate hikes going forward. What does it mean for your investment scenario . You say not too much has changed. Do you still like u. S. Equities at this point even though evaluations are toppy . I would add one point to the comment made earlier the bull market is taking its cue from the economy, and the prospect of earning bgs lsins b. Earnings are flattered bay weak dollar, that certainly is a nice effect at this point in time, but i cant see that margins are going to go upwards if Economic Growth is going to stall. Margins the odds of margins going higher is low, but margins have been stable at a high level for quite a long time the reason that margins will be coming under pressure has to do with wages we dont see a lot of wage pressures yet. The fed made it clear they dont see it either. Theres something bubbling, but no big wage pressure margins will stay higher for longer what i hear from a lot of people from around the desk is that the u. S. At some point is going to underperform. Europe has a lot further to go that is the consensus view at this point do you agree or disagree completely agree. Margins in the u. S. Are at cyclical highs margins in europe are on average like that. Monetary policy will stay easing longer in europe than in the u. S. You work in a field thats not loved much now, the fixed income field where do you see opportunities where do you see value in the space . Certainly its an interesting time for fixed income investing. One key is to be nimble and recognize its not just about the Government Bond space. We think there are a lot of opportunities in spread sectors, places like emerging market debt, for instance where do you see value in the fixed income space i concur that there is still relative value in Investment Grade credit and in high yields, but its a relative game, not an absolute game. How do you deal with the volatility which made a remarkable comeback last week on the back of the north Korea Tensions we dont know thats here to stay lets assume with the debt ceiling debate in september and october and more of trumps comments day in and day out, that will be here to stay. How do you protect your portfolio against that its difficult. Basically what were saying is that volatility has been ringed by Monetary Policy, and all the other events, big as they may seem, dont change the fundamentals as long as Monetary Policy doesnt change, volatility is likely to stay low whats your best bet on volatility volatility, we expect it to pick our focus is the timing of that we dont see the timing of the trajectory shifting until the end of next year in the meantime we think we can be in a relatively low volatility environment thank you very much for those comments well continue that discussion and talk more about the fed in a minute cnbc has obtained insider details about the collapse of trumps strategic and policy form head online to read more about the three female ceos who initiated the process that led to the groups demise. Email the show on anything that youre seeing whether you have any questions to the guests. The address is streetsignseurope cnbc. Com as always, you can find us on twitter, treetsignseurope cnbc i love reading your tweets you can reach me at carolincnbc. Coming up on the show, fed divided. July minutes shows policymakers pushing for cautious on rate hikes, hawks believe its risky to divert from normalization back in two. Theres a denture adhesive that holds strong until evening. Fixodent plus adhesives. Just one application gives you superior hold even at the end of the day fixodent. Strong more like natural teeth. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Welcome back to the show lets tell you about some Corporate News novo nordisk has announced a new diabetes drug succeeded in a trial. It sets the stage for the drug to become the new therapy for type ii diabetes the once weekly drug was shown to be significant in reducing glucose levels and lowering body weight like for like sales at kingfisher fell nearly 2 in the Second Quarter the owner of b q and screwfix in britain said a weaker French Market and poor sales dragged down numbers kingfisher said it remained cautious on the second half outlook. Vestas maintained its 2017 outlook as Second Quarter results came in below forecasts. The danish wind turbine firm kept its fullyear outlook. Earlier we spoke with the vestas ceo. Take a listen. It would be better in my opinion if u. S. Would stay in the paris agreement. On the other hand, what drives the market and will drive the market up beyond 2020 is the current structure in place in the u. S. That has the broad bipartisan support support. So that drives the market through the 2022 time frame. We dont expect changes in that. U. S. Wind employment actually increased nine times faster than the average employment increase in the u. S i think its Good Business ciscos fourth Quarter Results show a seventh consecutive fall in revenues figures for its closely watched security business showed growth of 3 , down from 16 a year ago that has raised concerns over the companys efforts to transform into software focused company. Shares fell more than 2 in afterhours trading. Josh lipton has the details. Cisco reporting 61 cents on revenue of 12. 1 billion. In terms of product revenue performance, switching and routing revenue decreasing 9 . Deliberation down 3 wireless and security increasing 5 and 3 . Looking ahead, cisco forecasts eps between 59 and 60 cents and revenue to decline between 1 to 3 , in line with forecasts on the Conference Call analysts asked Ceo Chuck Robbins about the switching business heres what he said. If you think about our guide last quarter, we anticipated that we also knew at the time that we were going to be making the announcement in june about the new platform so we anticipated these results. Any time we do a major platform announcement, particularly in switching, there is a period of time where our customers pause, because they want to understand what this means. So we did see a pause. We actually anticipated it but we saw great traction with the new platform another topic on the call, spending by the u. S. Federal government remember, that was called out as a sore point last quarter. Robbins saying starting in early may cisco was seeing more clarity and improvement there but facing uncertainty when it comes to spending by the fed josh lipton, san francisco. Chuck robbins, the ceo of cisco will speak to cnbc later today at 15 10. We have to talk about the fed. Minutes of the feds july meeting show policymakers divided over the timeline for future rate hikes. Some appeared wary about weak inflation, others are eager to get on with normalization. Let me bring back in my panel. Are we any wiser about how the fed feels about this conundrum which is the broken phillips curve . Not surprisingly they acknowledged the weak inflation weve seen recently. We saw that divided committee in terms of whether this is an idiosyncratic event or more structural that we have this low inflation environment what were looking at is the fact that the market really is not pricing much likelihood at all for a december rate hike its less than 40 in our view, while we will need to see inflation tick up from current levels, we think theyre in play for december they have a dual mandate some on the fomc claim that the weakness in inflation is just temporary its down to, i think, mobile tariffs, declines in mobile phone prices and prescription drugs. Thats the line from janet yellen do you agree with that view . Do you think theres a bigger underlying issue in the u. S. Economy, especially when it comes to wages wages this time around around after the financial crisis will be more depressed. When we look at the growth picture in the United States, which remains solid, and we look at the labor dynamic, which is very strong and improving, we do think that will ultimately put pressure on Wage Inflation we think its a matter of time and that over the medium and longterm we will start to see Wage Inflation pressure kick in. So we expect the fed to hike rates in december, pending inflation, with probably a couple hikes next year in order to get to the zero percent real yield, even if we have a fairly benign view of inflation then they might pause and see where to take it do you think the market is adequately pricing in what the fed might do in december the dollar still seems low same for treasury yields i think the 40 probability for december is on the low side. What i find more interesting is theres only one rate hike price for the next 18 months, which im sure thats too low. Im not sure about the december one. Thats even. But one in 18 months is too low, despite the fact that structurally inflation will stay low, but you have cyclical pressures and cyclical pressures are slowly building. Its not just the fed that is in the process of tightening, its also the ecb. Yesterday we got the leaked reuters report saying the ecb is not going to give new signals at the jackson hole symposium i guess well have to wait for september for the next press conference whats your best Case Scenario when we expect tapering from the ecb . Best case is that draghi would be announcing something in jackson hole given the strength of the euro recently, and the hints they have made themselves, its only likely that theyll postpone it and talk down the taper. What about you . Where do you sit we dont think it necessarily makes a huge difference whether they announce tapering at jackson hole, september or october meeting. The key is that we expect it to start at the beginning of 2018 we slightly revised our forecast we thought it would be more of a sixmonth process. We think that may be extended and take all of next year. Were looking for draghi to comment on the euro and the vent strength and the impact that could have on inflation. Lets talk about the last big central bank in europe, the bank of england we did get good wage data yesterday. 2. 1 in the last three months. Thats encouraging inflation is low the real squeeze on wages is going to be falling somewhat would that be, you know, enough of an inscentive for the boe to hike we dont expect the boe to hike soon. A lot of the data is mixed we think the bank of england will be on hold. Whats your key trade at the moment your key recommendation . I think the key recommendation will be to stay short duration, especially if you see Central Banks tapering, then eventually that takes out a bid for bonds. Then you see bond yields reacting first eventually youll have to be careful with credit as well. Same question to you. I stick with what i mentioned at the start, emerging market,