tv Power Lunch CNBC May 10, 2017 1:00pm-3:01pm EDT
i think they're going higher. >> up more than 1%. >> atw, unusual call ak it tift and abo activity. >> i dealt with the pullback. i stayed long and i'm going to keep it. >> jimmy? >> long the xrt. retail earnings this week. >> good stuff, guys. thanks. "power" starts now. the fallout from the president's firing fbi director james comey continues, and there are two big questions that still need to be answered. number one, will anger over this move, even among some in the gop, damage the trump agenda? and, two, why doesn't the stock market seem to care about everything going on in d.c.? we will dig into both. plus, trouble in the magic kingdom. disney shares getting hit today, concerns about espn dragging down earnings, but are those concerns overdone? another good question. i'm brian sullivan. "power lunch" has answers. we start right now.
and welcome to "power lunch." i'm melissa lee. as brian pointed out, disney shares getting slammed on the revenue miss. the stock is the biggest drag on the dow shaping off about 20 points off the industrial average. energy and real estate the best performing sectors, health care and discretionary the biggest losers. check out the big movers here, yelp about 20%, co it coty soar. >> thank you very much, melissa. welcome, everybody, to "power lunch." i'm tyler mathisen. losses at the u.s. postal service narrowing from a year ago. the e-commerce boom package to offset first-class mail declining revenue there. and amazon slashing free shipping minimum requirement to $25 from $35 for nonprime members. earlier this year walmart rolled out free two-day shipping for orders of $35 or more. and apple supplier foxcon will
begin construction of a u.s. plant in the second half of the year. we begin today perhaps understa understandably with washington and arguably the most highly anticipated white house press briefing of the trump presidency so far. a day after fbi director james comey was fired by the president, the deputy white house press secretary, sarah huckabee sand eers, will take t podium and face the press. our eamon javers will be in the room. he brings us the latest developments from the north lawn. eamon? >> reporter: that's right, tyler. last night the president fired the fbi director who is leading the inquiry into russian interference in the u.s. election in 2016. this morning the president met here at the white house in the oval office with the foreign minister of russia, sergey lavrov. the white house did not allow cameras or reporters into the room for that meeting but the russian government has tweet ed out a photo of the two men meeting in the oval office and
over at the russian embassy here in washington, d.c., lavrov reported immediately there after this to hold a press conference. here is what he was asked. here is what he said. >> translator: everyone kept saying openly that everyone knows everything but giving no proof. well, it's not serious. >> reporter: lavrov there saying there's no proof. it's not serious. he said donald trump has publicly denied the allegatios.s i can tell you this is attracting a lot of attention here in washington and around the world. just over my shoulder here behind me there's a crowd of several hundred protesters organized by liberal groups. they are shouting things like trader and shame and treason. we'll see whether that gets any attention here at the white house. as you point out we're waiting for sarah huckabee sanders who will be speaking to the press in about half an hour's time. she's filling in for sean spicer who they say is on naval reserve duty today and unavailable to
brief the press today. we'll see how huckabee sanders answers the questions swirling around the firing of the fbi director, tyler. >> thank you very much, we'll check back with you shortly. brian? >> so even if you do not care about comey's firing, heck, maybe you even agree with it, there still remains the issue whether this conflict upsets key republicans enough that they back off support for the president's agenda. let's bring in two people who have been inside the white house, cnbc contributors larry kudlow and sara. do you think when it comes to tax reform, corporate tax reform, health care, this outrange even among mccain and key republic ans will derail? >> mccain support the firing. mccain and lindsey. >> even the methods of the firing? >> i'm just going to mccain's statement. >> i've been up since 3:00.
i apologize. >> there are issues. look, i think no. this is a political matter. it's not a market mat thor. does it become a policy matter? it at the very tips of the margins, brian, it could be. it could be. i think, frankly, paul ryan's statement yesterday, the day before that everybody was pushing back health care a month or two, that the senate was going to consider health care more than people initially thought. frankly i think that's more significant than the comey firing. my guess is the president will appoint, you know, consensus choice to be fbi director and those investigations will go on. >> connect the dots between comey and, say, tax reform. there's a lot of arguing, a lot of anger right now even on both sides. but does it end there? >> i think it's really hard to connect the dots. >> the issue of comey fractures the republican party because it's already fractured. and so this fractures it further. is it going to make it more difficult to push ahead an agenda whether it be tax reform or health care for that matter?
>> it could. i'm not the final word. but when you say the republican party fracturing, i don't really see that. i don't see that happening. i think this was a shock, surprise. i think the timing was a big surprise obviously. almost everybody thinks he should have been fired last winter. so i get that but fracturing of the gop, no, i don't see any major fracturing at all. the democrats have not been willing to play on this regrettably so you have a polarized political atmosphere. i get all that. i think, frankly, as the dust clears and matters move forward, the disposition of the health care reform act is going to be the key to any business tax cutting and what i would call more market oriented stuff. >> sarah, what's your opinion? larry seems to think this distraction won't derail and might not even delay the accomplishment of, say, tax reform or other thing. do you see it that way? >> i don't know it derails it
entirely but delays it. one of the reasons anymore you have a distraction like this, and this is going to be a big distraction that goes on and on and probably ends with the special prosecutor which then causes people in the justice department, potentially people in the white house, to start hiring lawyers that takes time, energy and effort, and that means people are focused on defending themselves and not defending -- and proposing and promoting president trump's agenda. and so i do think this was a miscalculation, the way this was handled by the trump administration. >> but the action is legislative. the action is in congress not had in the white house. this investigation focuses more on the executive branch than the legislative branch. >> it does. it's a very fair point. >> we may have just lost sara's -- >> go ahead and pick up.
>> i think you make an important point. i'm not here to disagree -- nobody knows how this will play out. you're right this is legislative and the white house has all of its troops engaged in both health care and tax reform right now. heavily engaged. so, again, i come back to my paul ryan remark. in some sense they know they will push back health care in the senate, for example, which means it gets pushed back -- >> having nothing to do with this. >> this was out before the comey announcement, speaker ryan said that. mitch mcconnell has been saying similar things. we'll go slow on this. that's a more important issue, frankly. and it's important to divide this up. the actual damage and disruption internally there will be a new appointee. i'm not saying it will be business as usual. donald trump gets involved in the scrapes and somehow coming out of them.
>> sara fagen, i understand the concept, a lot of people in america probably agree with the firing of james comey. probably some republicans. probably some democrats. is this going to be a perma cloud, that and russia, and they are connected, that hangs over the president and that's the problem. it's not the fundamental architecture of politics larry was referring to. it's more of this cloud where people might want to stay back from any support of the president even if they want to do it. >> well, yes, certainly dumped fuel on the fire relative to the russian story and he may be the person most in need of the special prosecutor now because it may be the only path to clear up the cloud that has surrounded the white house. he has to clear that. as it results to the agenda i
think if republicans go through the reconciliation process on either tax reform or health care which looks likely they have no wiggle room. none. they need republicans rowing in one direction and these types of investigations where republicans feel on their heels, particularly as we get closer to a midterm election later this fall, they start thinking about themselves and their own political fortunes as opposed to potentially taking a tough vote on an amendment for the president. it's unfortunate that we're spending today talking about this as opposed to the importance of getting tax reform done. >> it is. i agree with sara on that. >> no one is saying trump had anything to do with it. trump's associates in the campaign, yes. >> and that needs to be investigated carefully.
there will be no special prosecutor. the intelligence committee will continue his investigations. he's very keen. he's a conservative guy, a trump supporter. they have to do what they're going to do. i just think, again, i don't -- perhaps the republicans will fracture on this. i just don't see it, frankly. it's a political judgment. if you disagree, i get it. does this hurt trump politic politically? i'm not convinced. i may be wrong but i don't think it hurts trump politically. >> he is teflon. larry's right. hinges tend to not stick to him the way they do to other people in politics. >> all right. sara, thank you very much. larry will come back later. we'll talk about this and more. market reaction, if you expected to wake up today and see the markets moving violently on the news of jim comey's firing you would have been wrong big time. all three major indexes hovering about the break even, zero.
the volatility index still trading below he 10. is the market really discounting the dysfunction in d.c. or seeing it as irrelevancy. with rbc capital, david kelly is chief global strategist with jpmorgan funds. i think i know what you're going to say, this is today's story, it's very important in the white house press room but not very important to investors, what matters to them is the underlying strength of the u.s. and global economy. >> yeah, and that's been the case for the last five months. the first three weeks after the election the trump darling stocks, companies that would n benefit the most from tax changes and regulatory changes, you know, torpedoed ahead or jumped ahead. but since that time they've given back all of those gains. and since election day there is no trump trade in the market. the market is higher because the underlying economics are stronger. the earnings are great. this earnings season was fantastic.
right after the election it was all donald trump. >> david, your thoughts here, my hypothesis has been that the main change that donald trump has brought is in the climate, the sort of emotions of the market rather than any particular legislative accomplishment and that that remains, investors and business people understand that they have a friend in the white house and an administration that will be friendly to business and not get in its way. it rather is going to get out of its way and that trumps everything. >> that may have to do with the movement of the market. i actually end up in the same place for different reason which is that between what larry
kudlow was saying about the health care problem that may delay the full implementation of the trump agenda. the trump agenda is a mixed blessing for the stock market. yes, cutting corporate taxes will be positive but restricting immigration, tougher on trade, those things are not positive for the stock market and a full employment economy would balloon the deficit and overheat the economy. the full trump agenda wouldn't be good anyway. it's a case of two wrongs making it okay. >> is it possible it may not be good for the economy but it may be good for the stock market? >> only temporarily. >> the worst thing for the stock market would be the federal reserve raising rates aggressively and pushing the economy into a recession. the problem is if you push as much fiscal into the economy right now there are things we very much like the idea of corporate tax reform.
at full employment you will overheat and cause a fed reaction. if you can just stretch out this long, slow expansion for a few more years without recession, that's probably the best. >> i'm not taking anything away and the positive benefits of corporate tax reform, but let's not forget, as i've pointed out many times, the stock market, the dow is up seven of the past eight years, 18%, 11%, 6%, 7%, 26%, 7%, neglect ative 2%. 13%. everyone says will this derail the election, it's a big world out there. the united states are doing better than they were five, six years ago. this is a continuing trend. >> earnings this season, eps growth and in europe it's something like 23% earnings growth. this is not a u.s. recovery
right now. it is a global recovery and i can't agree more with david that taking it at 4.4% unemployment rate economy and then putting extra kerosene will drive the it fed to crush this thing. i kind of disagree if the fed kills the economy because of too much inflation -- >> there's a risk of the economy ov overheating when we're at the a 2% growth rate. that would have to be a lot of kerosene on the economy. >> we're at a low underlying trend of growth and that will be around for a very long time. we're seeing wages rising. every secotor is indicating they're having difficulty finding people to find open positions pushing on this economy will do nothing but draw the fed in. it's not going to get more growth because there's not more workers to put to work. >> we have to leave it there. thank you, jonathan and david. we appreciate it.
n adidas is a company to watch because taylor made, the brands owned by idadidas, have offense been sold. taylor made, adidas, rather, inked a deal to sell its brands to a unit of kps partners, a private equity focused shop that specializes in industrial and manufacturing businesses. as a result of this adidas says it expects its forecast profits to stay the same. so, again, kps taking control of these guys in a deal contingent for $425 million, a mix of cash, secured notes and other contingent conversations, guys. back over to you. >> thank you very much, dom chu. a news alert. ten-year notes up for auction. rick santelli is tracking the action. yields hit session highs at the back of this, rick. >> reporter: nothing could make a d-plus on the three year look more important than a straight-out "d" as in dog, for today's tenure.
the one issued market was spotty. we ended up with a 2.40 yield. 2.40. i didn't even see that in the range of the one issued market today. if you go through the internals of these 23 billion ten-year notes, every internal is on the weaker side unlike yesterday it was only weakness and pricing and average stats, 2.33 bid to cover. the weakest since december. tomorrow is the 30-year bond and based on this activity i wouldn't look for any bright spots tomorrow either. back to you. >> rick santelli. still ahead, concerns about espn. disney shares taking a hit. where does the stock go from here? our next guest says they're heading lower. how much next. and if you think you've seen some fiery white house press briefings today, could really take it to a whole new level. sarah huckabee sanders will face
the press in a few minutes from now. you'll see it right here live in moments. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
definity. we are confident in espn's future. shares still lower after missing on revenue. shares down right now. let's bring back the analyst, a market perform rating, a price target. great to have you with us. >> thanks. >> what do you make of the market reaction to the actual report? >> i think it was what the market expected. disney said a lot about losses in advertising. i think the media stocks have gone down every day for the last week. investors are rotating out of the space. >> bob iger was trying to push the idea that growth would
offset the losses they would see when it comes to people pulling the court, et cetera. a cable subscription versus what disney can charge. far more volume in terms of people subscribing specifically for espn versus cable and satellite tv. >> obviously depends on what the price is. disney gets $7.50, $8 per month through the traditional cable operators. one way is to say we'll offer and charge $20 a month for and for people who really love sports to try to make it work that way. they could also go the other way to make it a lower priced product to make it up on volume. the reason they're not rolling it out yet they don't know what the right answer is. it's not clear what the right answer is. so i think they're trying to bide their time as much as they
can until the situation is clearer. >> do you buy the argument they'll be able to make up what they lose in cable subscriptions eventually? >> i think it's going to be tough. i think it's not just espn. all cable networks face the problem services like netflix and amazon provided to consumers where they're willing to offer you content for a very low price. and they're able to do that because they're willing to accept much lower margins than the average cable network makes right now. i think all cable networks will face downward pressure for the next many years. i think espn will be one of those networks. there probably isn't a lot they can do about it. >> we have to go but how many percent of their subscribers have they lost the last five years or three years? >> they're in the low double digits. >> how much have subscriber fees gone up. >> 7% a year on average.
>> over four or five years their fees have gone up more than their subscriber losses? >> yes. you have to keep into account the cost of their sports content is going up at a good rate. they're not quite keeping up with that. >> thank you. $95 price target on shares of disney. all right. we are minutes away from the first white house press briefing since president trump fired fbi director james comey. this will be indeed a trial by fire for deputy white house press secretary sarah huckabee sanders. she has the tough job of filling in for sean spicer who is out for naval reserve duty. we'll bring it to you live the moment it happens.
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♪ ♪ it's your trade. e*trade. start trading today at etrade.com welcome back to "power lunch." shares of whole food markets are in the green on a slight pickup in volume up by half a percent and this is on the heels of reporting from dow jones saying whole foods plans to change more than half of its board of directors according to sources familiar with the situation. the whole foods board changes include a new chairman, the current chairman has been since 2009. the story goes on to say the changes at whole foods that are planned are not part of a settlement with activist investor which owns 7% of the stocks. it's a stock to watch up again by about half a percent now close to a full percent in
trading today. back over to you. >> we are expecting the earnings this evening, dom. increased activist pressure not just from jana but owns about 2.7% of the company sent a letter late last month essentially saying you'd better hire some advisers here and explore strategic options. from other major shareholders disappointed with the stock. >> it's one of the reasons the stock has been on a bit of a shorter to medium term move higher in the markets as people were expecting these changes with activist type voices in the marketplace and of course other big investors as well. so this is a stock that was once very much on a down trend but has found at least a little bit of footing as of late because of this movement. we'll see if it continues. >> dom, i can't keep up with you. >> the magic of television. >> we are moments away from a very highly anticipated white
hi, everybody. i'm sue herera. here is your cnbc news update this hour. defense secretary jim mattis visiting u.s. and nato troops says he's confident the u.s. will be able to resolve tensions with turkey over the u.s. decision to arm kurdish fighters in syria. turkey views the kurds as a terrorist group and slammed the u.s. decision. >> we will work very closely with turkey in support of their security on their southern border. it's europe's southern border. and we'll stay closely
connected. we have very open discussions about options. and we will work together. >> back here at home atlanta's interstate bridge will open. the bridge was closed last march when fire closed a section of the busy interstate to collapse. it will save the state $27 million. and kentucky derby winner always dreaming working out at the pimlico racetrack for the first time since arriving in baltimore. the 1 2nd preakness, the middle jewel in the triple crown, will take place on may 20th. you're up to date. that's the news update. back over to you, brian. >> sue, thank you very much. well, we are standing by for one of the most highly anticipated white house press briefings. sean spicer will not be running the show. his deputy will take the podium. it's a day after the president
fired fbi director james comey. spice certificate on naval reserve duty. we'll bring you the press conference live the moment it begins. let's bring our own john harwood. what impact is the firing of comey going to have on the trump administration and perhaps on the trump agenda for health care, tax reform, et cetera? >> reporter: a serious impact on both. it will consume the energies of the trump administration because the white house staff was caught unawares by what was happening yesterday as was james comey himself. and so they will have to respond to the rising heat from political opponents. and in terms of the agenda on capitol hill, remember the agenda has always been fated to move slower. on health care they have to finish health care before they can do tax reform if they want the favorable rules to pass with
republican votes. the longer the health care thing rides out, the longer it will take to get to tax reform. the other impact is that as we see some republican support for trump begin to fragment, you have republican senators mccain, jeff flake, richard burr of north carolina is leading the investigation, criticize what president trump did, why he did it, when he did it, that makes it more difficult to hold those 52 members of the republican majority together sufficiently to move controversial things forward and, of course, you have the backdrop of the 2018 election, the special election that's coming up in a few weeks in georgia where democrats are trying to build some momentum for 2018. so it's a very challenging moment for this white house. >> all right, john, thank you very much. now to kayla tausche across the way on capitol hill. what is the reaction in congress? we've heard from majority leader mcconnell and some others.
>> reporter: well, tyler, the house is notably out of session this week. while we have seen reaction from some members of the house it has been at a distance. the temperature has been rising on the senate side with senate democrats trying to strategize to figure out how they move forward. what are their next steps? do they put up roadblocks to any future nominations for the position? do they continue to ratchet up the calls for a special prosecutor leading the investigation into russia? nbc news caught up with richard burr who is leading the intelligence investigation, and here is what he said about particularly appointing an independent committee to investigate. >> to suggest that i would be for a special prosecutor, my job is to lead an investigation. so i'm not in favor of a special prosecutor because i think the committee can come to a conclusion. >> reporter: so in addition, it is the deputy's attorney general
who is leading the russia investigation on behalf of the doj and fbi. notably he was confirmed with only six voting against him. blumenthal was a no vote. he has said today that he would no if there is not a special prosecutor. senator chuck schumer has said he wants a special prosecutor, too, now more than ever was his phrase that he used this morning, even though last month he did support rosenstein in his confirmation. there will be a hearing on the hill tomorrow that was supposed to feature james comey as director of the fbi. it was supposed to saefrpt on worldwide threats. that was the title of the hearing. since then mccabe, the acting director of the fbi has been invited to testify in comey's place. of course the it tenor of the hearing will take on a very different tone. >> kayla, thanks very much. reporting from capitol hill.
as we await the daily white house press briefing today from deputy white house press secretary, let's bring in the economic policy analyst with the american enterprise institute, a cnbc contributor. the former ceo of office depot and autozone, also a cnbc contributor. and former chief white house ethics lawyer under president george w. bush from 2005 to 2007. he's professor of the minnesota law school. you're quoted in a "rolling stone" article -- i don't know whether it's an accurate quotation or not. you say we can mott tolerate this for the president to be firing people investigating him and his campaign and its collusion with the shrussians. it's a lot worse than watergate. explain. >> well, of course it's worse than watergate. watergate we didn't have a foreign power much less the russians conducting espionage inside the united states. that's what we had in 2016. so this is as if you took watergate and rolled it all into
one this is a very dangerous situation where russia has been trying to destabilize our democracy since the 1920s. somebody was helping them inside the united states. there was some collusion. we don't know who it was, but this is an investigation which director comey was undertaken and then he's fired in the middle of the investigation when he's starting to get warm on some things. the president cannot fire the fbi director while he's being directed by the fbi director. this is an abuse of power. >> i would then assume that following your logic here you believe a special prosecutor that does not report to the white house is in order here.
>> absolutely. a special prosecutor is in order. president trump would be high-fiving him over the clinton e-mails. he appreciates everything comey did with the clinton e-mails. that's one of the reasons he's in the white house. it's about russia. we know it's about russia. they're lying to us when they say anything different. >> to jimmy and turn it back to the idea this has the potential to stall legislative action and the trump agenda. what do you say? >> i think it absolutely does. the record of presidents engulfed in scandal getting big things done is not good. bill clinton didn't get much done during the loaiza monica lewinsky scandal. if democrats want to in the senate they can shut this thing
down. they can have the senate moving at a glatial pace. can they keep that up? they can if the public is on their side. if trump's approval ratings drop, democrats will keep the senate slow and democrats are going to do that if they don't trust whoever the fbi replacement is and if there's no special prosecutor. >> i hear a lot of comparison to nixon and watergate. a lot of comparison in some ways to clinton like you mentioned. let's be clear. they're not perfectly analogous, are they? both nixon and lyclinton when ty were under investigation they were in the later years of their presidency. nixon was sort of a failing out president in his second term. clinton it was 1998 when it came to light. congress had no reason to help them. they knew they were gone anyway. can't you argue that in the beginning of a term there's going to have to be a reconciliation process? i don't mean with the budget. >> listen, during the clinton
years, clinton and newt gingrich were about five minutes from massive social security form. the lewinsky thing breaks, that collapses. right now the democrats are slowing down the senate, and they can -- listen, they can continue to do that. the trump agenda was already stagnating. if democrats do not cooperate like this nothing will happen. again, can they do that for a long period of time? if trump is sitting there with 20% approval ratings, they sure can. >> right, right. steve, you're feeling more optimistic about the economy, things are looking up, the stock market is relatively calm and fairly strong, at this point you see this happen, what's your reaction? do you get more cautious about the agenda not being put into place and so, therefore, maybe a delay on tax reform, do you start holding back on your plans? >> well, obviously the market hasn't reacted. the market's relatively stable today. it's been the lowest period of volatility we've seen in some time. i think the question is, is this a big political scandal like has been described or is it simply
more political theater? the answer to that question, i think, will define things. at this point the market is reacting like its typical political theater. in the business community they see people come and go all the time, see firings, there's a lot of reasons. you never know and you never see publicly what the reasons are. this is a very natural thing in the business community. i don't expect an overreaction here or a change in long-term strategic capital deployment or anything like that unless we see this bubble up and explode into a full political scanndal that freezes washington. but this whole notion of democrats being against the republican president and vice versa, republicans being all for it, that's the way it's been here forever. and certainly with this new administration you've got it split right down the middle. the democrats weren't going to do anything yesterday. >> it's pretty simple. does this increase the odds of passing health care reform, which is the admission ticket to tax reform. does it make that at least
marginally more likely or less likely? >> how about neutral? why is neutral not an option? why is neutral not an option? >> why is what not an option? >> why is neutral not an option? why is no impact an option in your view? >> it's not an option because you need the senate to act, and right now the senate is not going to it act if democrats are going to slow things down, and you also need presidential leader shship to bring republic together on health care reform where there's no agreement and tax reform where there is deep disagreement. trump is supposed to be the blue here bringing people together. if he can't do that it will be very important who the next fbi director is. the agenda at least incrementally is less likely to pass. >> everybody, we'll take a pause. we're standing by for one of the most highly anticipated white house press briefings of the trump presidency. sarah huckabee sanders will take the podium a dap after the
president fired fbi director james comey. we'll bring you it live the moment it begins. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade
as we await the daily white house press briefing from sarah huckabee sanders let's bring back our guests. mr. painter, right now no one has particularly laid in the investigation into the russian hacking or the russian influence of the election, no one has laid a glove on the president or anyone really terribly close to him. >> well, certainly did with respect to michael flynn. general flynn -- >> that's a fair point. that's a fair point. >> in the white house for an 18 days and is an undisclose d russian agent. that is shocking that the white house was on notice that he had undisclosed ties with the russians and they kept him in the white house.
and then we have attorney general sessions who misrepresented his contacts with the russians in his own confirmation hearing this is a very bad situation. i think president trump could remedy it but only through full disclosure of everything he knows about the contacts between his campaign and the russians and the appointment of an independent special prosecutor. that's what we need. >> we might have to
cut this off here, jimmy. let's cut it off. sarah huckabee sanders, deputy press secretary, taking the stage right now. >> slow news day. >> that's what i've heard. good afternoon, everybody. as most of you, i think, know sean is on reserve duty for the rest of this week, so i will be briefing you today and in the following days. i have a few announcements here at the top before i take your questions. i have an update on the tunnel collapse at the nuclear waste site in washington state. the incident is moving from the emergency phase towards the
recovery phase after extensive testing we remain confident at this point that there has been no indication of worker exposure or an airborne radiological release. personnel began taking steps to stabilize and fill the hole over the partially collapsed tunnel last night. we expect those efforts to be completed today. over the tunne last night and expect it to be completed today. the site remains closed to non-essential personnel. looking closely at what next steps should be taken with regard to mitigating future tunnel breaches. in washington, d.c. today, as sean mentioned yesterday, the president is focused on preparations for his upcoming foreign trip. he met this morning with the russian foreign minister, following on the visit of secretary of state tillerson to moscow last month. a readout of that meeting went out about an hour ago, and i'd refer to you that for further questions on the meeting. outside of d.c., as part of the administration's ongoing effort to address the opioid crisis in america, secretary price continues his living tour learning from those on the front
lines battling the epidemic. today he will meet with officials in maine and new hampshire to discuss how the administration can best support the local initiatives to combat this travty. secretary zinke in utah visiting national monument sites and meeting with local officials to comply with the presidential executive order that ordered a review of national monument designations. the secretary also took another step to advance the president's america first offshore energy strategy by reversing an obama administration action to halt scientific research in the outer continental shelf. and secretary devos is in daytona beach, florida, delivering then address at the university that's an example of top-notch education hbcu historically and continue to provide to their students and i know the secretary is honored to be there today. there's also another nugget of big news as you guys may have been paying attention in regard
to the termination of the former fbi director comey. the president over the last several months lost confidence in director comey. the doj lost confidence in director comey. bipartisan members of congress made it clear that they had lost confidence in director comey. most importantly, the rank and file of the fbi had lost confidence in their director. accordingly, the president accepted the recommendation of his deputy attorney general to remove james comey from his position. before the news broke the president spoke to several members of congress to inform them of his decision. those members are senate majority leader mitch mcconnell, speaker of the house paul ryan, senator chuck grassley, senate minority leader chuck schumer, senator feinstein, senator lindsey graham, house majority leader kevin mccarthy. house minority leader nancy pelosi, and congressman bob
goodloe. later in the evening he also spoke to senator bob corker, chairman of the senate committee on foreign relations. in addition to the big news happening at the white house today it is also my daughter scarlett's fifth birthday and since i'm here and you aren't i get to wish scarlett a happy birthday and with that i think her first birthday wish would probably be that you guys are incredibly nice. and now i will take your questions. >> -- helpful establishes the facts. a couple broader questions. number one, yes or no. did the president direct rod rosenstein to write this memo on james comey? >> no. the president had lost, again, like i said, he'd lost confidence in director comey. frankly, he'd been considering letting director comey go since the dayle day he was elected but it have a conversation with the deputy attorney general on monday where they had come to him to express their concerns. the president asked that they
put those concerns and recommendation in writing. champion is the letter you received. >> so it is the white house's assertion rod rosenstein decide and his own to review director comey's performance? >> absolutely. and america on its own decided comey was not the person that should be leading the fbi as numerous comments we've seen in the democrats and republicans and people across the board. >> senator fine seeinstein said president asked the president to review this. is she lying? >> he asked them based on the conversation monday. asked them to put the recommendation in writing but they came to him on his own. again, the president lost confidence in comey from the day he was elected. wasn't sure he shouldn't fire -- >> may 3rd, the president said he had full confidence. why do you say that? >> i think, again, he's
questioned director comey's reason for needing to stay at the fbi. he had countless conversations with members from within the fbi. i think one of the big catalysts we saw was last week on wednesday. director comey made a pretty startling revelation that he had essentially taking a stick of dynamite and thrown it into the department of justice by going around the chain of are command when he decided to take steps without talking to the attorney general or the deputy attorney general when holding a press conference and telling them that he would not let them know what he was going to say, and that is simply not allowed, and somebody like the deputy attorney general, rod rosenstein, who everybody across the board has unequivocally said, this guy is a man of upstanding character and essentially the gold standard at the department of justice, when you take an action like that, when you go around the chain of command and the department of justice, then you
have to make steps and take action to make a recommendation to the president and that's what he did. >> and -- >> john? >> the russian investigation, how do you respond -- >> we'll come back to that, i'm sure. >> you said from the podium just now the president lost confidence in him over the last weeks and months, we had thought this was all rosenstein's doing. when was it -- when was it the president lost confidence in james comegy what was the tip point? >> an ierosion of confidence. i think director comey has shown over the last several months and frankly the last year a lot of missteps and mistakes, and certainly i think that as you've seen from many of the comments from democrat members including senator schumer, they didn't think he should be there. they thought he should be gone. frankly, i think it's -- startling that democrats aren't
celebrating this, since they've been calling for it for so long. >> hang on. >> follow-up. >> and i have another one to ask, too. >> i think there's a two-question limit around here. right? >> follow-on, on that, a lot of missteps and mistakes. back end of october this president was applauded the fbi director, when he reopened the investigation into hillary clinton's e-mails. seemed quite happy with him at that point. what changed? >> i think the president's position. one, he was a candidate for president. not the president. two very different things. once you take over leading the department of justice, that's very different than being a candidate in a campaign. as you guys all know, there's a very clear distinction between those two things. i think, also, having a letter like the one that he received and having that conversation, that outlined the basic, just atrocities in circumventing the
chain of command and the department of justice. any person of league mind and authority knows what a big deal that is. particularly in the department of justice. particularly for somebody like the deputy attorney general, who has been part of the justice department for 30 years, and is such a respected person. when he saw that, he had to speak up on that action, and i think that was the final catalyst. >> and a quick question, the meeting of this morning. the president is accused by democrats trying to circumvent the russia investigation by firing comey, he meets with the russian foreign minister and ambassador of the united states. and meets with richard nixon's secretary of state. the timing of all this, ironic or is this the president poking a finger at his critical eye? >> these are meetings on the books for ay while. they didn't just happen this morning. there's not a strategy to go after democrats on this.
frankly, the saddest thing is that democrats are trying to politicize and take away from something that the president should be doing. he should be meeting with the foreign minister. he should be meeting with people like kissinger and for them to try to attack him for doing his job? maybe they should spend a little more time doing their jobs and we wasn't have all the problems we do. >> isn't it true the president had already decided to fire james comey and he asked the justice department to put together the rationale for that firing? >> no. >> when did he make the decision? >> he made the decision for the final decision to move forward with it, it was yesterday. but i know he's been contemplating it for a while. >> how do you explain what dianne feinstein says, that the president told her he was concerned with the mess at the fbi and asked the justice department to look into it? >> i can't speak for senator feinstein but i did speak directly to the president, and heard directly from him that he, again, had been considering
letting director comey go pretty much since the day he took office, but that -- there was no request by him to have a review at the department of justice. >> is the reason for the firing what was written by the deputy attorney general? is that why he did it? >> that was, i think, the final piece that moved the president to make that quick and decisive action yesterday. >> what did he mean, in the letter that he wrote -- informing comey he was being fired? he said, on three separate occasions comey had told him that i am not under investigation. what were those three occasions that the fbi director told the president he wasn't under investigation? i'm not going to get into the specifics of their conversations, but i can tell you that director comey relayed that information to the president. >> following up on that, did the president ask director comey whether he was under investigation when they had these meeting? >> again, i'm not going into the
specifics of their conversations. >> the white house, obviously he made a decision to stick that in the letter and make it public. any concerns it was appropriate they had that type of conversation? >> no. charlie? >> how important was the fbi director's ability to stop, in the weeks going out of the fbi -- [ inaudible ]. >> that's probably one of the many factors. i mean, you can't deny somebody that that wasn't a problem, and so i think that was just another one of the many reasons that he was no longer had the confidence of the president or the rest of the fbi. >> can we expect more firings from the justice department? >> not that i'm aware of today. >> and going forward, does the president want the department of justice to shut down what he's called the taxpayer funded charade investigation? >> he wants them to continue with whatever they see appropriate, and see fit. just the same as he's encouraged the house and senate committees to continue any ongoing
investigations. look, the bottom line is, any investigation happening on monday is still happening today. that hasn't changed. and, in fact, we encouraged them to complete this investigation so we can put it behind us and we can continue to see exactly what we've been saying for nearly a year. there's no evidence of collusion between the trump campaign and russia, and we love for that to be completed so we can all move on and focus on the things that, frankly, i think most of americans are concerned with. >> even if they keep on wasting taxpayer money? he wants it to continue? >> look, nobody wants to waste taxpayer money. the president made a priority of this. another reason we'd like it to come to completion. i know you all won't let it go. we'd love for that to be completed,ut it behind us and focus on what we need to do to turn our country around. >> two questions. was the white house aware at the time of this decision and announcement that grand jury subpoenas in the case of michael
flynn had just gone out? >> no. nor should we have been. >> do you know anything about that process? >> no, i don't. i'd have to refer you to -- >> does the white house believe that if these investigations are going to proceed in these allegations of russian interferenirncht feren interference and who will lead that investigation? who will run that right now? are you confident it will be -- does it have to be somebody else? >> i believe that falls to the deputy attorney general, rod rosenstein and we are incredibly confident in his abilities as, i believe, you can tell by the rest of the senate including many democrats are as well, given the fact he was confirmed 94-6 and had overwhelming praise from both sides of the aisle. i think there's complete confidence in him. and another reason, frankly, for director comey to be out of the way so they can have somebody leading this effort that everybody across the board has respect and confidence in.
nobody wants this to be finished and completed more than us so we can focus on what we need to do here. >> the president said, excuse me, sean spicer said a week ago today, the president has confidence in the director. so, again, i'm sorry for not understanding this, what's happened in the last seven days to shake the confidence? was sean lying at that point or did something happen in the last seven days? >> of course you'd love to add that in. certainly not. again, i think one of the big things that took place was the process in the hearing on wednesday, where, again, not to sound like a broken record, but since you guys keep asking the same questions, i guess it's only fair i keep giving the same answers, but you have somebody, the director of the fbi who reports to the deputy attorney general going around the chain of command that simply is not okay. that's not something that is allowed in the justice system. nor should it be. that's a huge problem. that along with the corrections
that had to take place over the last 48 hours, those are all big problems and another i think kind of final piece that pushed the president to make the decision that he did. >> does he regret not doing it earlier, like on january 20th, or january 21st? >> no. i believe the president wanted to give director comey a chance. but he feels he made the right decision certainly. >> why did he do it as -- why didn't he have one of his longtime security advisers hand deliver a letter to the fbi? when the fbi director was, in fact, in los angeles? didn't he deserve a phone call or a -- a face-to-face conversation? why did he decide to do it that way? >> he followed the proper proposprot kah protocol. handwritten notification. no matter how you fire someone it's never an easy process and so he felt like following protocol was the best thing to do. >> has -- >> i'm not aware of that
conversation. >> was the president aware that james comey asked for more resources in the russian investigation and did that factor into his decision to get rid of mr. comey as director? >> not that i'm aware of and that's a better question for the department of justice. >> follow-up. on the campaign trail president trump freechquently said, lock up and criticized the department of justice for not being harder on hillary clinton and had the gut to open the investigation. why was he moved by a letter that said that director comey was, if anything, too harsh on hillary clinton? why did that move the president to fire him? >> i think you're looking at two very different positions. ed pret was wearing a different hat at that time. a candidate, not the president. those circumstances certainly changed when you become the president and, again, when you go around the chain of command in the definite of justice. when you, like i said before, throw a stick of dynamite into
the department of justice, that's a big problem. not one that cannot be ignored. >> we already knew that. didn't we, sara? already knew what comey had done. >> my understanding, wednesday was the first time the director had openly and publicly made that statement and made that clear. >> sara -- d-sarah -- >> did not report incidents of violence in chechnya against the -- community? any reason that wasn't included -- [ inaudible ]. >> i'm sorry? could you speak up a little bit. >> sure. a reason they wasn't included in the readout because the president being informed about the -- >> look, i mean, a lot of times there are parts of the conversation that aren't specifically included in a readout. but -- i'm not aware. i haven't had that conversation. so i don't know. i wasn't part of that meeting. so i can't speak to every detail and i'd have to refer you to the readout on the specifics of what
i know was discussed. >> and the -- >> briefed on this issue generally? >> that's something i'll have to get back to you on. i'm not 100% sure. >> you ked you'd want a russian investigation to continue at doj. would the white house oppose the appointment of a special prosecutor to continue to look into the investigation? >> we don't think it's necessary. you have a house committee, a senate committee and the department of justice all working on this. i don't think there's a necessary need at this point to add that. you've got the deputy attorney general, who i would say is about as independent as it comes, due to the fact he has such bipartisan support. >> and such confidence that rank and file within the bureau lost faith in the fbi director, special agent inside, wrote us and said the vast majority of the bureau is in favor of director comey. this is a total shock. not supposed to happen. the real loser, 20,000 front line people in the organization because they lost the only guy
working here in the past 15 years who actually cared about them. so what is your response to these rank and file fbi agents who disagree with your contention they lost faith in director comey? >> look, we've heard from countless members of the fbi that say very different things. in fact, the president will be meeting with acting director mckade later today to discuss that very thing. the morale at the fbi, as well as make an offer to go directly to the fbi if he feels that that's necessary and appropriate. and we'll certainly provide further information on that meeting if he does. >> and -- asking for a voice in this election process. mr. comey's successor. something the president supports? >> i would have that conversation, but i know at this point it's being run through the department of justice. i would refer you to them on what that process looks like at this point in time. >> thanks, sarah, who does the
president consult before making the final decision to fire james comey? >> the president spoke with a number of individuals, end of the day, it was the president's decision. >> in between monday night and tuesday when he decided to fire the fbi director, did he speak again with the deputy attorney general or the attorney general? >> i know they spoke on monday. i believe the next follow-up was actually in writing. they may have spoken as well but i have to double check to be clear. >> is it accurate to pull away from the information we have that monday night the president made the final call, said i want this in writing as a recommendation and then took that recommendation as the evidence that he wanted to provide to fire james comey? >> my understanding is that the decision was actually made on tuesday. but the first conversation that he had was on monday when there was an oral recommendation made and the president requested that he see that in writing to review it further. blake? >> thank you. you say you want to move on and focus on the things americans care about. let me ask you about that.
somewhat half way home on health care, still have tax reform, a spending bill. debt ceiling and infrastructure. that's just a handful -- >> a big list. >> right. but what happened yesterday, you could argue, just widened the divide and made d.c. politics more toxic. how do you go about accomplishing all of those things with now the heightened political environment we're in? >> frankly, i'm surprised that it did create a divide, since you've had so many republicans and democrats repeatedly calling for director comey to be gone. frankly i don't think it matters what this president says. you'll have democrats come out and fight him every step of the way. that's one of the things that's wrong with washington and one of the reasons that we've got to get back to focusing on those issues and frankly draining the swamp a little bit further. >> surprised by the democratic backlash? that he anticipated, considering the past statements?
>> how could we have? considering most of the people declaring war today were the very ones begging for director comey to be fired. if hillary clinton had won the election, which thank god she didn't, but if she had -- and she had been in the same position, she would have fired comey plead immedia comey immediately and the very democrats would be dancing in the streets celebrating. it's just, i think, the purist form of hypocrisy. jennifer? >> two questions. one, a report in israel that indicates the president made a decision not to move the u.s. embassy from tel aviv to jerusalem. has he made a decision on that? >> the president has not made a decision yet, still reviewing that. >> follow-up. >> sorry. >> also, president erdogan in his speech warned the president against moving the embassy to jerusalem. does that warning, and warnings from other arab leaders play into this decision considering this move? >> i'm got getting into the
decision-making process here. i can tell you he's still reviewing it. as soon as we have a decision we'll be happy to report back to you guys. >> thank you. two questions. both related to the selection of a successor to director comey. when president carter chose an fbi director he had a blue ribbon panel advising him. presidents clinton, obama, interviewed several candidates. is the president going to follow this pattern, or does he have some individual in mind at this point? >> right now i know that there are several individuals being considered, and the first step will be determining the acting -- excuse me. the interim director and that is being handled through the department of justice. so i refer you to them for right now. >> and the other question i was going to ask -- >> yes, forgot you have two. >> i've got two. and -- i'm pretty nice, charlotte. aren't i?
>> charlotte? >> the -- >> scarlett. >> that's okay. >> he doesn't get a questionly inmore. >> it's a southern thing, maybe. >> her daughter -- >> charlotte. >> her daughter. >> a birthday. >> get that in again. happy birthday, scarlett. >> scarlett! >> "gone with the wind." come on. >> no. i was going to say, it is a fact that the association of former fbi agents and veterans of the bureau, generally prefer people who have been agents themselves or have a background in the fbi. only two former agents have been director in the last four decades. will the president consider current or former agents for the position? >> i would say that he's not ruling anything out at this point but, again, as of today, the department of justice is handling the first step in this process.
>> should the attorney general who has recused himself from the russian investigation have any role in the selection of a successor? and given the fact that in his 100-day interviews the president himself said he had confidence in director comey at this podium the american people were told he had confidence in director comey. can people take at face value what the president says about personnel issues like this or his views on things like this if just two weeks later he's out? >> absolutely. take full confidence in the words of the president in terms of whether or not attorney general sessions should have a role, look, the fbi is doing a whole lot more than the russian investigation. everybody in this room and probably most of the media around the world would like to think that's the fbi's sole responsibility, but that's probably one of the smallest things that they've got going on their plate in the 20,000 employees that work there. so he should absolutely have a role in seeing who runs that
agency and that department. zeke? >> does the president have confidence in the acting director? >> yes, he does. >> and secondly, you mentioned earlier that you're encouraging the fbi to move on from the russian investigation. is it appropriate for the white house to be directing the fbi what to do with any investigation they're currently investigating? >> i don't think that that was the nature or the intent of my comment. it wasn't to direct the fbi. but i think it's simply -- we're fully compliant with helping this process move al and would like to see it completed so, frankly, all of us can move on and focus on things that blake listed earlier, like tax reform, health care, infrastructure. those are big programs, big priorities for this administration and frankly, what we'd like to be, the number one thing we're talking about here today, everything single day, is not fbi investigations, but things that frankly affect american voters and american
taxpayers every single day. >> sarah -- >> why is it [ inaudible ] the -- the monday meeting? was that because of the hearing last week or -- what he said there? or the monday meeting that the president had with doj officials come out of a longer process of -- of consideration are something? >> the department of justice officials were here for other business, not specifically to meet with the president on that. the topic came up, and -- they asked to speak with the president and that's how it moved forward. >> usually talk to attorney general sessions or deputy attorney -- about the possibility of going -- [ inaudible ]. >> not that i'm aware of, no. >> i'm sorry? >> did it come up in the discussion process before the confirmation? when the president was considering nominating rosenstein? did he talk about rosenstein then? >> not that i'm aware of. >> the president's statement he
talked to comey whether or not he was being investigated raising several questions. can you talk about why you're not willing to add anymore to that, who asked for that and why it was discussed? >> who asked for what? i'm sorry. >> won't the -- the president trying to exxonerate himself frm this. why he won't add more to the conversation, how and when it took place? >> i think -- >> clarify the three occasions. >> i'm not getting into specific details. i'll check and see if we have follow-up on that. at this point i won't comment further than what was spemed out in the letter. i'm sorry? >> why was it in the letter? if you don't want to clarify it, why put in the letter in the first place? >> look, something far above my pay grade was decided to be included. i won't get
into the specifics of that. thanks, guys, so much. >> -- inappropriate for the president to ask -- all righty. about a half hour's press briefing, begin about 10 of 2:00
eastern time. concludes about 20 minutes part the hour. the white house deputy press secretary sarah sanders concluding the press briefing. and for reaction, john, we learned a little more about the timeline of the firing of james comey. specifically that there was a meeting monday's evening at the white house where the president aired his concerns about mr. comey and the deputy attorney general and i think the dow jones industrial did the same. and then the president asked for those individuals to put their concerns in writing for him to make a decision. >> that's right. although it was a little hazy, tyler, exactly the genesis of that conversation in the first place. sara huckaby sanders said president trump lost confidence in comey over months? thinking about firing him since day one? even though the president publicly expressed confidence via sean spicer and in his own
conversations with james comey and then said, sarah huckaby sanders said president trump will not directed the doj review of comey's performance, but that he had asked rosenstein and sessions to produce a memo summarizing their concerns. so -- it wasn't exactly crystal clear how exactly the meeting came about or how exactly the letter, which became the justification for the firing, came about. >> talk to me a little bit about something that kept coming up in ms. sanders briefing. that was that democrats, like senator schumer and others, whom she i believe rerch ferenced mr comeys firing or resignation after the way he handled both that july 5th news conference last year, his congressional testimony that followed and then, of course, the recent release of a letter announcing that the investigation was going to be reopened into hillary
clinton's e-mails. >> well, all of that is true. there was a lot of criticism of james comey from democrats, from the hillary clinton campaign, but it's entirely a different thing to fire someone after he has publicly testified in congress that there is a serious potentially criminal investigation going on involving the president and his campaign and his associates. so -- you had the person who -- whose team, whose circle, was the object of that investigation firing the person who publicly affirmed it. that is not consistent with how we're used to having the american criminal justice system work as it relates to politicians, and that's why it's an entirely different situation or set of circumstances from when democrats were calling for him to quit. >> thanks very much. john harwood in washington. let's bring back in our cnbc contributors larry kudlow and
stephen and joe watkins, former white house aide to president george h.w. bush. welcome all. joe, begin with you. i think all of america wants to know this -- where does this go? it will either be investigated and ultimately fade away and we move on or become something even more serious than it already is, joe. what do you think is going to be the ultimate result? >> well, brian, i think that -- this is obviously the story of the day and it's going to stay in the headlines for a day or two, but i don't any this ultimately takes away from the trump agenda. as long as the economy continues to move forward and they're talking about tax reform and as well as trying to get a health care bill passed, they'll be able to get that done. what they do know is -- >> joe, sorry to jump in, buddy, but people are comparing this to watergate and nixon. not just the media, by the way. there are actually, congresspeople and senators are out there comparing this,
calling it nixonian. >> some say, not quite, of course. obviously, optics aren't good with regard to timing. end of the day, even john mccain, no fan at all of president trump's, john mccain came out and said that the president does have the right to fire the fbi director. after all, bill clinton exercised the right to fire the fbi director in 1993 when he was the new president of the united states. so it's happened before where a president has fired a director of the fbi. so although the optics may not be perfect for donald trump, especially given the investigation, at the end of the day, he's within his right at the particular ed to fire the fbi director. i think in time this moves on, especially if the person appointed to take the fbi director's place is somebody with a lot of credibility with democrats and republicans. >> professor kudlow, why is this not nixonian? >> i don't think -- i don't think that's a good comparison. it didn't take long to come out. i'm not shocked it came out. i think these are entirely
different circumstances. i just want to say, one of the things i took away from this, we talked about it earlier--by the way, sarah huckaby did a terrific job under tough igs cans -- sounds like with respect to the president, comey blew the lid off this, in his testimony last wednesday. >> absolutely. >> particularly when he sort of bragged he went around the attorney general and decided to, you know, not seek an indictment. all of that stuff is just so offensive to the normal judicial process. that's what i took away. then a series of events happened. it will been in trump's mind, and i would add to this, i think the sooner they can start getting a replacement, the better they're going to be, and i just want to put somebody on the table, who was on trump's list last january. that's former new york police commissioner ray kelly. and kelly is a non-partisan guy, mayor bloomberg's guy for many years. as early as 2011.
senator chuck schumer touted kelly to be fbi director. that's the kind of bipartisan pick i think trump needs to make and make it quickly. >> steve oddlaland, running a business, does this matter to you at all? do you -- if you were still ceo the -- at office depot, would you have spent three minutes talking about this today, in any business context? >> no. and because this kind of stuff happens every day, as i said before, in business. but i'm hearing these comparisons to -- three people saying that this is nixonian because he talked to henry kissinger. really? that makes this whole thing nixonian? i don't think we have the facts here. i've heard democratic and republican senators say that they see no evidence of any wrongdoing by the president or related to russia, and so as a business leader, you're looking at this and trying to determine,
is this going to be a political crisis that turns the markets and up-ends the country or a policy issue? i think at this point it looks more like political theater. will it delay addressing some of these policy issues? maybe. i don't any so -- yet. >> a fair point. made it last hour and was wrong saying no one close to the president was implicated in this russian investigation. mr. flynn surely was. mr. sessions was tangentially but no one directly implicated the president, as you just pointed out. >> not even the "new york times," in initial reporting said this is aimed at trump. it's aimed at his associates and colleagues. >> i needed to correct that. >> and those near him. >> the principle in rux, source of the intelligence leaks how that can be stopped and where they're coming from. >> joe, quickly, 30 seconds. do you think democrats are being duplicitous here? comey would have been fired if clinton was elected, in a
moment? >> right, exactly. i think clearly they've left themselves open to being calmed duplicitous. all calling for comey's firing last year during the campaign. and now, of course, they're upset he's being fired. so -- that's a tough one for them, and i think this is a short-lived story. for the moment a big story but a short-lived one. >> joe, steve, larry, our thanks to you. the reason why comey's firing matters to the markets, if it derails parts of the trump agenda that generates business. paul ryan is pitching tax reform to business owners in ohio today. that story is next on "power lunch." asing print security with enterprise printers by hp. which is great, unless you're a corporate spy. unsecured printing makes your network vulnerable. enterprise printers by hp help prevent costly security breaches that can compromise your network and reputation. so i'm stuck spying the old fashioned way. hey. i'm not spying. secure printing by hp. i.t. orchestration by cdw.
welcome back to "power lunch." breaking news involving boeing. shares the boeing moving lower today after the company announced it is suspending test flights for the new 737 max airliner. a plane that is close to first deliveries. doing test flights for a number of months. the company said it is suspending those due to an issue with the leap 1b engines. leap are engines made by a partnership between ge aviation and safran out of france. according to boeing, they are
working with cfm, short for who manufacturers the leap engines, to inspect the discs in question within these leap engines. again, suspending test flights for the 737 max. this is the next version of the 737. guys, first deliveries are scheduled to begin next week. see if that has an impact on whether or not we see the first deliveries begin with boeing next week after announcing they found an engine issue. out of abundance of caution, suspend some test flights. >> do we know -- this is i know boeing's workhorse. the 737. they've sold thousands over their lifetime and many in the backlog. how many of this version? do we know? would want to put you on the spot. phil, sorry. >> i don't know the exact backlog on the max but it is the future. it is critical to the future and we should point out, they're still in the process of doing test flights and working through all of the issues you do before
you do that first delivery and they were notified of a potential issue with some of these engines. so out of abundance of caution. never an incident which doing some of these test flights, they were notified by cfm, may be an issue with some of these engines and will suspend the flights while they investigate this. the potential, could be significant, keep in mind, they have done no deliveries yet and no indication at this point particular boeing they will delay first deliveries which begin next week. >> you mentioned, phil. general electric, one of the makers of leap engine, that stock is ticking off a little, off this news. as i understand it, phil, from reporting a did a few years b k back, the leap engine used 3d printed parts. i wonder if that makes it more possible to figure what is wrong with this engine and fix it faster? >> yeah. well, based on the limited information we have so far,
boeing has been notified by cfm of a particular issue with a particular part and they're investigating that. whether or not that was 3d manufactured or some other fashion we don't know at this point. fairly quickly, ever been to ge aviation, their facility outside of cincinnati. >> yes, i have. >> they know quickly when there's a particular issue with an engine and where to pinpoint what to go after. >> right. >> so we'll certainly get nor details i'm sure in the days ahead. >> apartment turnaround for a fix must faster with 3d printed parts. should be a quick fix in theory. phil, thank you. phil lebeau in chicago. hererherera, cnbc headlines. and mike pence defending president trump's firing of director comey saying it was not related into the investigation of possible contacts between the trump campaign and russia. >> president trump made the right decision at the right
time. and to accept the recommendation of the deputy attorney general and the attorney general, to? for the termination to support the termination of the director of the fbi. it was simply the right decision. >> microsoft says a half billion devices are now running its latest operating system windows 10. that's up from 400 million, microsoft closed back in september. still far short from the goal of 1 billion devices running windows, 10, by 2018. we end unfortunately on a sad note. the wife of longtime espn broadcaster chris berman that died. katherine berman was one of two people killed in a two-vehicle accident tuesday afternoon in woodbury, connecticut. the bermans were married 33 years and have two children. that's the news update this hour. tyler, back to you. >> very sad news. sympathies to chris and his
family. >> absolutely. the oil market closing for the day and for that we go to jackie deangelis at the commodities desk. >> good afternoon to you, tyler. oil having its best one-day gain since november today. a little bit more than a 3% gain on the session. this was after the department of energy reported a drawdown in crude oil inventories over 5 million barrels. much more in line with seasonal patterns than we've seen in the last few weeks. gas prices, higher than this time last year by 24 cents. o -- 14 cents. aa saying average for a gallon of regular $2.34. crude prices still beaten up. down more than 10% in a month, eve win today's gain. back to you. >> jackie, thank you. we are watching snap shares. a gainer. and the stock graph, a public company, will it keep that run going? that and more coming up on "power lunch." ow. well wait. what did you think about her? it's definitely a new idea, but there's no business track record.
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instagram copy some of its most popular features. the numbers to watches the company warned whenconsent public the growth rate of its user base would decline over time. expecting addition of 9 million daily user, about 167 million. the number under scrutiny agrowth slowed added in the fourth quarter. the company rolling out a number of new tools for advertisers. analysts also watching average revenue per user. wall street projects the company will lose 19 cents per share with revenue of $157.5 million, up about four times from the year-ago quarter. now, analysts mixed about the impact of more competition from facebook and instagram with room for growth of both. and saying snap's valuation is expensive given that competition. we could see the stock move dramatically after hours. options pricing in a 13.5% swing
in either direction. guys, back to you. >> thank you very much, julia bort stin. is now the time to buy snap ahead of its first earnings report? bringing in equity analyst, a buy rating and thes 25 price. you like it here. what is going to be the most important? julia ran through a bunch of metrics. what's most important for you? >> i agree on the dea side both as well as revenue. >> uh-huh. >> i got to level with you, though. this is a very difficult setup going into the quarter, because you have incredibly high expectations and the same time incredibly negative bias. inverse correlation there, if you will. for a guy like me,s that long weight now. >> high expectation, 8% run-up in the past month in the stock? >> the highest expectation, this is not a company missing numbers coming out of the gate. no. there is a level of conservatism there implied in the consensus numbers you do see.
what we're trying to do with the buy rating, see the forest for the trees and think about a company that can redefine the camera app on the phone and content experiences with deals with the publishers and augment monetization by multiples from here being just 10% of facebook and twitter. a long runway on the revenue side. on setup, we like to see a little something easier than the first earnings out of the gate. >> say looking at the trees in the trees and want to know the entrai point for snap. how other social media companies performed as a publicly traded company. linkedin was down, twitter down and facebook down. sle stay clear, at least today? >> i'm not saying stay clear. if our thesis holds, you can grow multiples from stock is today looking into the longer
term, but that said, this is the stock where it is trading now is below where initially it opened, well below the peaks near 30 we saw. you can make a case on the valuation. yes, it is expensive, but it is also growing seven times faster than the peer group and trading at sub two times greater than the peer group's multiple. i think with that kind of outperformance on the top line, if we do see it, which we think you can see meaningful upside revisions to estimates, can cause increase in the share prices. >> how many questions do you think get asked about facebook stories 0en that conference call this afternoon? >> unfortunately, too many. probably. the thing is, there's just too much comparisons being done to instagram stories. i get it. instagram and great. we think valued around $50 billion. basically double where snap is. end. day, we think the use cases for snap are different, more about messaging, the content experiences.
more about raw experiences versus the curated kind of -- kind of creatively filtered ones we see on instagram. look, early days. snap, i think, has a tremendous opportunity ahead of itself, and -- we like it. >> all right. james, thank you. james cakmak. snap may the cnbc destructor 50 list for 2016. the list revealed for this year tuesday on cnbc. and on deck, forget investing in america, or in europe. coming up, investing in higher risk emerging markets, are they your best bet? stick around. ♪
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either way, is it a good bet? >> interesting bet. three things looking at eem. the first thing, what's happening with oil and commodities. you know, that's probably the weakest story here, because we're seeing oil still struggling to maintain its strength. however, you are seeing an uptick in trade. trade is definitely something very beneficial, particularly for chinese stocks and that has a global story and that's continuing. then, of course, the outlook for the dollar. that's somewhat connected to trade. the outlook for the dollar, could be getting to the end. we start a rally, could be a positive time to buy into eem. >> okay. there you go. boris, currency grew as well. gina mentioned currencies. do you buy this thesis? a currency part of the story? >> definitely. generally i think it's also a very interesting trait. there is also demographic advantage, growth advantage, but it doesn't come without risks.
political and credit risks on this trade. obviously, much more higher beta than buying the s&p but it does have, i think, at this point, better upside than the s&p. >> kept it short. thank you very much. boris and gina. for more head to our website. house speaker paul ryan and gop leadership begin pitching their tax reform plan to the american people. the fires of the fbi james comey made that job a little more difficult, or, maybe, a little easier. we'll take a closer look, coming up. >> announcer: and now, the latest from tradi tradingnation.cnbc.com and a word from our sponsor.
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-- for reaching agreement. the utah senator will argue for getting rid of the corporate tax and taxing investment income and ordinary. radical idea and hard to find time to reconcile the big differences when washington keeps getting consumed by self-inflicted wounds. >> indeed washington is, but i posted a tongue in cheek picture on my facebook and twitter, circled a little dot, and then the whole rest of the country, and i said, not d.c. d.c. we got to remember a lot? a huge country out there. a big story. don't say it's not. the businessman in boise just wants to sell more stuff. i wonder if this is going to impact that? i think not. >> that's why paul ryan is out in ohio to try to make that case to the public. it's notable he is doing this tour with business owners, because that's really where your
theory, ground swell of support for tax reform is coming from. not the average american saying i'm crushed by the tax system but business owners saying the tax code is too complicated. what can we do to help small businesses, manufacturers? those are the people providing political support and political cover for getting this done. >> and thank you very much. check, please, is next. there's nothing traditional about my small business so when it comes to technology, i need someone that understands my unique needs. my dell small business advisor has gotten to know our business when it comes to technology i need someone that understands my needs. my dell small business adviser has gotten to know our business so well, feels like he's a part of our team. one phone call, sets me up with
tailored products and services, and when my advisers is focused on my tech, i can focus on my small business. what are you doing? getting your quarter back. fountains don't earn interest, david. you know i work at ally. i was being romantic. you know what i find romantic? a robust annual percentage yield that's what i find romantic. this is literally throwing your money away. i think it's over there. that way? yeah, a little further up. what year was that quarter? what year is that one? '98 that's the one. you got it! nothing stops us from doing right by our customers. ally. do it right. let's get out of that water. ally. do it right. ray's always been different. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways.
check, please. >> watching snap, parent company closely. earnings report, publicly traded company released after the bell today and of course a lot of people looking at the metrics such as daily active user as well as revenue per user. but take a look at the setup here going into the earnings reports. snap up about 8-plus percent due to the 2% gain and options market pricing at about 13.5% in either direction. could be fireworks in the afterhour session up or down when it comes to snap. >> you started to ask, james about whether he thought how many times -- he thought the facebook would -- how many times i thought james comey would come up on the facebook call. >> here today. that's not my check, please. mine is, caught me by surprise, david kelly. introducing the idea he's worried about, get this, an overheating economy. this and looking way over the horizon as far as i could tell.
this, if major tax cuts, major infrastructure spending, major stimulus comes in on the fiscal side that then would cause the fed to respond by tightening interest rates even more that could then drive the overheated economy into a recession. i was surprised to hear anybody in a 2% economy with very low inflation. >> i was surprised, too. >> worried about that. >> talking about the effects, i believe -- i don't want to speak for david. the effects of, if the fed goes -- >> longer term. meantime, didn't precrude a stock market rally. tax reform passed, infrastructure spend passed, markets would rally. >> look at mortgages coming out. home prices we showed in california. some of the -- there's things -- >> that $2 million, 800 square foot -- >> not saying anything, say it without saying it. some things remind me a lot of 2006 right now.
including the vix. >> a lot of leverage in the system. >> more credit card this year. >> a low and -- >> all of it. >> i worry about other things. i'm not even going to worry about alexa and the eck 0 oak e than a hot economy. >> and "fast money" at 5:00, despite the comey news, good stock in the news. invideo, electronic arts and beauty supplyky cody up double digits. guys, not sure the last time we saw three s&p stocks up more than 10% that wasn't related to a deal. this is just plain, old-fashioned corporate earnings. >> a market flash. dom chu? >> the flip side of the coin. etf ticker, took a big leg lower, as much as 1% after boeing announced suspension of flights for the 737s phil lebeau talked about and watch shares of
triumph group, down all day. another leg lower when the boeing news came out. triumph supplies about 675% of the shares. you can see down by about 10% pap back to you. >> thanks, dom. headed 0 ut to vegas. and steve wynn, mark cuban and wayne newton singing on the show all tomorrow night at 5:00. thanks for watching "power lunch." >> big day. everybody, welcome to the closing bell. kelly evans at the new york stock exchange. >> how do you do too? snap. >> crack's, pop. >> no. the stock -- >> snapping because of snap. >> oh, snap. that's that comment there. >> not a lot of guys can snap their fingers. you're lucky. >> i don't know why that is. most talked about ipo of the year reporting earnings in about an hour. use it for advertising numbers, front and center. and we'll be talking about what to expect on those earni