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tv   Fast Money  CNBC  July 28, 2017 5:00pm-5:30pm EDT

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kind of decisions that he needs to keep the staff in line with his leadership >> sara, thank you for calling in appreciate it. sa sarah fagen. >> we'll let's "fast money" take it from here guys, thank you both that does it for "closing bell." "fast money" starts now. >> yes, it does. kelly, thank you so much i'm brian sullivan, hosting "fast money" in for melissa lee. obviously, we have some big, breaking developments out of washington, d.c. as you just heard the news, we are seeing reince priebus out as chief of staff john f. kelly is in as chief of staff. this just coming down literally moments ago. we've got a great group of traders here tim, steve, david, and dan are your team today. we'll talk about the market impacts from the d.c. dysfunction and also this breaking news in just a moment but let us go back now to get more detail, if you're just
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joining us, ylan mui in washington, covering this breaking development ylan >> obviously, this is a big shake up at the white house. here are the tweets that donald trump put out. he said that john f. kelly will now be white house chief of staff. he called him a great american and a great leader he also said he has done a spectacular job at homeland security and he has been a true star of my administration. now, one interesting question in all of this will be how kelly will be able to handle what is clearly a politically potentially toxic environment for him going forward. when he worked for leon panetta, who was secretary of defense, one of the questions that he had was that he didn't want to go into an environment where there would be political infighting and political sniping. leon panetta even telling cnn at one point that that was the last place that he would want to be but this is now something that he will have to grapple with going forward. president trump also just
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tweeted, now i would like to thank reince priebus for his service and dedication to his country. we accomplished a lot together and i am proud of him. so, again, big shake up today at the white house. other open positions, that could now come into question jeff sessions, that is another cabinet member that the president has criticized publicly bi we'll see if anything happens with that position going forward. guys, back to you. >> ylan mui, thank you very much this is "fast money," so let's keep this to the market angle, if we can. but tim, we've seen d.c. drama, some will call it dysfunction, whatever you want to call it, another big change in the white house from a markets perspective -- >> might be the white house calling me now >> is your phone really ringing right now? >> go. >> he could be the next ag right here >> we almost got through that but -- >> again, does this matter for the overall markets or is it just a continued d.c. show that is separate and distinct from the market show? >> well, look, we've been going through a transition all week.
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and if you think about it, you know, yesterday, the news on the retail sector was that the border adjustment tax was dead on arrival, and in fact, you were starting to get some movement towards possibly compromise in tax reform so one can make an argument that although, you know, this has been political theater that we've never seen before, that the whole reason for the white house to make some changes was to get on with an agenda that has been badly stalled, so if you think about, again, i go back to -- there seems to be some posturing within the border of adjustment tax, tax reform, we've gotten some movement on the hill in terms of where will we are with the health care, nothing has happened, but this choppiness is not new for this administration >> the border adjustment tax is -- bat is doa that thing is dead on arrival. but that also calls into question, further tax reform, which i think, we can agree, when we talk about the equity markets in d.c., perhaps nothing is more important than the idea of tax reform, from a stocks perspective. >> absolutely.
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no question. if you look -- we talk about it all the time on this show. tax reform, it's not going to be reform it's going to be cuts. it's going to be tax cuts. the markets giving a pass. first quarter 2018, this administration has this sort of time frame to actually get something done but they need to get points on the board from a confidence perspective. >> does this hurt confidence >> i don't think this hurts confidence at all. this is a nonevent when it comes to trading stocks on monday morning. when you look at numbers, s&p, earnings, earnings aren't factored in right now at all any of the tax cuts. so that could be a massive, you know, push forward, if we do get some sort of news on that and we feel like the momentum is building >> here's the thick. just this week tells us there's no legislative momentum building that's just a fact, right? we have the republicans, they blame the democrats they can't get this health care bill through. but the fact is, every failure that they have on the legislative front -- >> they're all false -- >> no, what i'm saying, i'm not being partisan here, but makes the likelihood of some grand tax
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reform unlikely. and then what happens is at best, you probably get some sort of repatriation, but the democrats aren't going to give anything at this point so they're not going to -- >> well, they don't need them. >> they don't need them -- >> but their own party is the problem. >> they need the republicans to get in line. and no new regulation seems to be what's kept the market up here and then earnings kept the market -- >> well, how about this. how about this -- let's flip it, guys steve, how about this point of view the market is reaching new highs every day. every day we have the d.c. drama. and every day we make new highs. maybe not getting much done isn't a bad thing from an equity perspective. >> actually, dan and i talked about this when he was elected that gridlock could be -- >> that's what i mean. >> within his own party, and markets love gridlock. i do think that markets love lack of regulation and they're not going to get any new regulation with this administration >> i guess the ultimate question, tim, comes down to this simple one, which is how much of this record run has any kind of tax reform or tax cut
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plan built into it if it's zero, we don't feed to worry about it if it's 10%, then we need to worry about it >> i think it's #5% i don't think this is anything the market is trading on i think the market is trading on central banks. i think the fed is stepping away from the table a couple days ago. i think the ecb has been wishy-washy. and that's where the risks were before all of this i think washington has strangely gotten a pass. but we said this often on this show, the difference between this administration and the last one is enough to make this environment a very healthy one for stocks >> guys, we're going to talk more about the markets and this, but let's get back down to washington, d.c. where ylan mui has more details on this breaking development >> brian, nbc news is reporting that a source close to the president said that reince priebus had got an short reprieve when the motion to proceed on the health care bill passed however, once the health care bill went down in flames, that was, quote, the final straw. so some insight into exactly how
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dramatic this situation has been and how quickly this decision might have been made a retporter for "the washington post" also tweeting a picture of the van in which president trump was departing in from joint andrews air force base reince priebus was in that van with the president so, clearly, he was still in the inner circle until these very final moments. in addition, president trump did talk about secretary kelly today, in his speech, in new york earlier he said he wanted to congratulate kelly he'd done an incredible job as the secretary of homeland security and called him one of the great stars of the administration back to you guys >> ylan, thank you very much, guys so donald trump seems to be blaming personally reince priebus for the failure of health care. let's flip that around john f. kelly, who is now the new chief of staff is a lifelong marine >> right i know where you're going here >> political independent
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i wonder if trump believes this strong-willed marine can now get done with priebus could not get done >> why would that be the thought? and why is the chief of staff responsible for passing the health care bill -- >> he's not, but the chief of staff could be responsible for getting the gop in line -- >> he knew -- >> strong arming the gop >> -- definitely reince has a relationship with the gop, of course, we get that. and there's no shot that mr. kelly, that general kelly, has anything to do -- >> you said shot >> i thought it was -- >> or would have any ability to -- >> he was the head of the rnc. no kidding >> what are the things that have caused volatility for financial markets is really the question here and to me, what this signals is very soon, we'll have jeff sessions out republicans have already said they would be disappointed about that ref reince out, former head of the rnc. we'll have sessions out. then he's going to fire murelle woe okay that's the thing >> but does that matter -- >> hold on
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>> -- a political roundtable -- >> there is a chance -- >> but back to the markets >> i actually think this is the sort of thing. you're talking about legislative gridlock i'm talking about a constitutional crisis. i'm talking about something far greater here and that's the source of like -- that could be the source of a lot of volatility, at a market that's all-time highs, very complacent -- >> all-time lows -- i hear what you're saying and i'm not minimizing the importance of what's happening, but i do wonder, when we look at what's supposed to drive the markets, earnings, corporate earnings are henry and mabel in the midwest not going to go buy a new car because they're watching tv and they're angry about the d.c. dysfunction i don't see that happening people are guy to buy homes, they're going to buy cars, they're going to sell things >> we got the confidence boost from the fact -- deregulation or even the thought of less regulation but importantly, you talk about 5% potentially being priced in for earnings i'll give you an example chris krueger is our washington, d.c., you know, strategist he took, as a base case, took
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out cuts in 2018 took it out of his estimates market didn't move and they listened to him people listen to what he says. market didn't even move. didn't even phase him, because -- i'm sorry to cut you off. >> look, what the equity markets are moving on is the fact that interest rates on the ten-year, at 220 tha they're at 50 basis points across the european union. we've had pmis and manufacturing data around the world that are at five, six, seven, eight-year highs. unemployment near record lows. and central banks that are complacent in the short-term, it means asset go higher and equity allocation out of fixed income continues. that's what this comes down. and if you had central banks on the warpath, they're trying very hard to normalize. that's what's going to hurt stocks more than what's going on in washington. >> if there's a sniff of repatriation, a sniff that some sort of tax cuts could be on the horizon -- >> risk is to the upside >> boom. >> and by the way, there are democrats that are on board with repatriation we spoke with john delaney on capitol hill, where he's got a plan to use repatriation dollars
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that would go into some kind of an infrastructure bank the other way to think about this, too, might be this which is, i've personally spoken with members of congress who have sort of whispered to me that all of this drastic gives them cover to kind of get stuff done, because the attention is focused yesterday. >> steve liesman said this yesterday. what is wrong with 26% on tax reform that apparently is rout theout right now. that would be a victory. it's not the aggressive numbers we were talking about. >> you're not getting to 15 -- >> absolutely not. i agree. >> yeah. >> it would be -- the market is factoring in at least -- so, a 26% number would be very favorable. so anything better than that, we take off >> there's another angle here too. there have been reports that gary cohn may be in line for a chief of staff job maybe. he's obviously not getting that. there have been other reports that gary cohn may be in line for the fed job. >> he does not want -- >> he now does not have the chief of staff job dan nathan, do you think there's
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a chance gary cohn becomes the next fed chair and is he qualified? >> here's the thing, at the end of the day, i think what you said, tim, is really important we have record -- not record low rates, but very yenear we have commodity prices that are very weak and a dollar that is very weak all of those are the ingredients that should make risk asset prices go higher so to answer your question, who cares about gary cohn, no offense -- >> his family. >> but the biggest drawdown the u.s. equity markets have had have been 3.5% this year so it comes back to the level of complacen complacency. >> it may be fair to say, it's the most politically volatile year we've had in a long time and the least market volatile year >> this is really important. overnight, north korea fires an icbm, right -- >> off the coast of japan. >> and the big story is that our rexit, you know, we may have the secretary of state leave this
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week so we're missing a lot of really important stuff here, is the point. that used to be the source of market volatility, right when we would have some sort of rogue nation firing off -- >> maybe because everything is etf and the computers are in charge let's bring in senior cnbc contributor, larry kudlow. thank you very much for joining us on such short notice. do you think that priebus being out and john f. kelly, a very strong-willed marine coming in, maybe can resuscitate some of the things, the tax reforms, the infrastructures that we just talked about >> well, i think you're going to see a more disciplined white house staff. john kelly will probably be closer to, let's say, isa james baker or an andy card, people like that, and have a tougher process. you've got all these people who are assistants to the president, you know, walking in, at any time and circumventing the chief of staff my guess is the former marine will, in fact, change all of that and you will see a more
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disciplined process. that's what i guess. by the way, i think it's remarkable -- scaramucci telegraphed this what he said in his temper tantrum against priebus, i believe, must have come from the president and that was a leading indicator and so now i'm guessing, this is just guesswork, brian, because i'm not in washington right now, aisle guessing other shoes may fall >> such as do you want to care to speculate, larry >> rihymes with cannon. >> pardon? >> does it rhyme with steve cannon the other shoe that might drop >> yeah, i don't know. i mean, it could -- steve bannon, maybe. i don't know this. the president has been in a rhetorical verbal war with his attorney general, jeff sessions. that has not been resolved yet i don't know how that's going to turn out
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there are a lot of rumors that the president is unhappy with his special counsel, robert mueller, and he's gone too far already and he's gone fishing into trump's finances, et cetera, et cetera. the president has the authority to dismiss his attorney general. the president has the authority to dismiss a special counsel the president has the authority to dismiss the deputy attorney general as well. so those could be shows that fall i honestly don't know. but, you know, nick, you have to look back at the tweets. now it looks to me like there's more reason than rhyme all of these things may have been leading indicators, especially this scaramucci assault on -- >> maybe, but, larry, let's look -- let's look at -- i've often said that washington, d.c. is the biggest corporation in the world. so let's take a look at d.c. as a business and if you and i were sitting on the set at cnbc and analyzing a company where the top executives kept coming and going, every couple of months, we would say, that company is in trouble or
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doesn't know what it's doing is it fair to look at d.c. that same way and say, this white house needs some order >> well, i think it is fair. you're past the six-month period, so, that -- >> they're not kids anymore. >> they're not kids anymore. sure, if you're looking at a corporation who can't hang on to its top executives, you would look askew at that and you wouldn't like it one bit >> but no corporation -- ultimately, this was a rookie team that took power and on some level, you had to expect welcome this isn't a partisan statement at all these are all people that wasn't been a position like this. you would have to expect there would be some attrition and churning within the ranks. >> well, i think that's right, and i think that's what's happening. and i guess the messenger was scaramucci that's what i find most interesting about this now you have to go back and take another look at the president's tweets who's on that list
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by the way, i heard mention of gary cohn. cohn -- trump himself, in his interview with "the wall street journal," put gary cohn in play for the fed chairman, okay that was trump mr. cohn did not say that. that was the president, who said that so i think that gives some credibility to the possibility, the likelihood -- i'm not saying it's a done deal, all right? but trump did that and i think from what i gather in my own visits to the west wing and so forth, trump has been very impressed with gary cohn's performance and his abilities to run a good staff and get briefing papers and so forth and so on. >> but in anthony scaramucci's rant, interview, whatever you want to call it, he also called out bannon so, to steve grasso's point here, larry, if you believe that scaramucci was the messenger on priebus, can we also discern that he is the messenger on
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bannon because he went after them sort of equally in that interview >> well, it's an interesting hypothesis, brian. it's an interesting hypothesis >> and what would you believe if it's true. does that mean they're tightening ranks in a positive way, or do you believe there's so much fighting, that it's not going to get cleaned up? >> well, look, these are hard questions to answer. i think that president trump, as you put it, is tightening up i think he wants more discipline my guess is, he wants fewer people running in to resolve this he probably wants more message discipline, more policy discipline a lot of those things have been lacking. my opinion, most of his policies have been rather good. but executing the policies and messaging the policies, not so good >> larry -- >> and i think -- i think priebus --
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>> -- so how does this though, larry -- steve grasso, how does this, when you really start to look at getting stuff done, we chatted about it a couple of minutes ago, how does this new chief of staff really carrier the ball this is a guy that doesn't have extensive relationships on capitol hill how does that even move the ball, other than just clearing the deck >> well, look, i think he does have relationships on the hill as homeland secretary, but also in the chain of command in the marines. i think he knows a lot of people on the hill. so i'm not so sure about that. i think this -- i'm just guessing here, but i think potus want a simpler operation a more stream lalined operation, that will make it easier for him to move from issue to issue. and take away some of the clutter. you know, your point about steve bannon -- look, i'm not making a forecast here, but you're correct, i think it was sully,
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bannon was in the scaramucci rant, and therefore you have to think about, maybe he's on the list also. >> yeah, it's david sieberg, one quick question, larry, just in general. when i look at it from a corporate perspective. we're looking at a company with this much turmoil and now negative it is, i'm looking at it in a more positive light. this is a president who says, i know when to cut bait, get the poor performers out of my organization, push them out quickly and fiercely, because i want to implement change your opinion on that >> well, right, listen i don't mean to sound negative on this, by the way. i think general kelly is -- i don't know the man, but from what i hear, he is somebody who will bring order where there is chaos. so don't let me sound pessimistic. i think this is probably a good move i've argued a couple of times on the -- sully, with on your show, in the afternoon, that there was too much horizontal activity in the white house. everybody equal and not enough
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vertical activity. and years ago, when i worked for reagan, james baiker was a brilliant chief of staff and he ran a vertical operation you can get your point of view in, but he was a very strong gatekeeper and lord know ifs you missed a deadline on something, the wrath would come down. and i see that happening here. >> larry, i many friend, thank you very much. a short break here, guys we'll come back with more. reince priebus out, john kelly in as chief of staff what does that mean for your money, the markets, everything we're back right after this. stick around
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all right. welcome back to "fast money. your top story breaking just minutes ago, reince priebus out as white house chief of staff. let us go back to washington, d.c. with elylan mui as well >> the president apparently tweeted that reince priebus was out when he was on air force one with reince priebus. that tweet came out while they were on the same plane once they did disembark from that plane, dh had bewhich had new york, the president apparently said that reince is a good man and that john kelly will do a fantastic job. now, there are several news outlets reporting that reince priebus actually had resigned privately on thursday. so perhaps there was some -- perhaps there was some indication that this was coming down the line as this health care bill failed
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we do have the bite of president trump commenting on priebus's departure. >> reince is a good man. john kelly will do a fantastic job. general kelly has been a star. done an incredible job thus far, respected by everybody a great, great american. reince priebus, a good man thank you very much. >> reporter: so a big shake up here in washington a lot of internal politics coming out into the open for all to see, guys, this weekend we'll see what happens over the next 48 hours. >> it is, ylan, and some speculation about this, as well. i'm going to put you on the spot a little bit, based on our previous conversation. have you heard anything at all -- i know you're an excellent reporter and have been in d.c. a while, about the possible fate of one mr. stephen bannon >> i can tell you that i have not heard anything about the possible fate of stephen bannon. however, you were talking
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earlier about gary cohn. and i think that for our audience and our viewers, that is an important one to watch one way the dynamic has been described to me in terms of that relationship is that as long as gary cohn thought that he was empowered and had the ear of the president, he would be willing to stay on in his current role if he felt like that power was threatened in some way, perhaps he might leave and perhaps, the fed job would be a graceful exit for him we'll have to see how the appointment of kelly to this position of chief of staff shax up that power dynamic. but right now gary cohn has a large staff. he is considered the expert on things -- all things economic. so, we'll find out whether or not that continues and how secure he feels in his position. >> ylan, it has been a crazy week sean spicer, robert short, and now reince priebus ylan, thank you very much. appreciate it. >> sure. >> so, yeah, guys, we saw sean spicer, robert short, a little bit less visible, but high level, now reince priebus out, possibly more coming
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when we rook at this, we're listening. it's political intrigue, but i bring it back to the markets and money, should something at home say, okay, let's trim our stock -- let's sell. i'm nervous now, d.c.'s a mess or -- >> i get very nervous when the fed is politicized and therefore , if we're talking about some presumptions, we're lacking at the tea leaves, but janet yellen has been groomed for that job her entire career and say what you want about fed policy and how dovish it's been and too dovish, the federal reserve has remained independent. and we've heard that they were trying to politicize the fed and we can to the politicize the fed in this country. i think a lot of the things we're talking about so far haven't really mattered. but if you start to get to a place where we truly feel like the game is totally controlled through the system, i think people are going to bristle at that >> i 100% agree with that. that is probably the pbiggest risk from a market perspective in this entire thick reading the tea leaves with gary and what transpires from that from a political or sort of an
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internal political scenario in washington is very important because you're absolutely right, tim. i don't necessarily think the market would view it very favorably, if he slipped into that position. >> i don't think he will slip into that position, but i don't think it can be seen as a fixed game you're seeing the push back. >> there are places where the executive branch can have total power to influence the outcome >> sure. >> the president, we know he watches the markets, we know he watches cnbc -- >> absolutely. >> he did this after the markets closed what happens -- what happens monday >> monday, no impact to the markets on this particular -- >> we haven't seen any impact on any other political story yet. >> i agree it's not going to hit the markets at all i think people will talk about, it will become headlines, but there's nothing that will impact the way stocks trade specifically -- >> you guys are missing one big point, also. this guy has undermined every single one of his cabinet members who have done things he hasn't liked
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it started with sessions, recusing him did it with secretary of state if he gets around to do itting with mnuchin, those are the kind of things the market may start to care about. >> all right, guys, thank you very much. appreciate it sp have a good weekend. catch us back here on monday at n'mo p.m. eastern. dot ve yet a very special options action will start after this very short break. we're on to you, diabetes. time's up, insufficient prenatal care. and administrative paperwork... your days of drowning people are numbered. same goes for you, budget overruns. and rising costs, wipe that smile off your face. we're coming for you, too. for those who won't rest until the world is healthier, neither will we. optum. how well gets done.
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