tv Squawk on the Street CNBC August 24, 2017 9:00am-11:00am EDT
water after users spoke out about discrimination using the platform we can take a quick look at where things are going to set themselves up. dow higher nasdaq up 15 points higher s&p 500 up about 5 points higher. >> thank you. >> thank you for having me. >> when are you on >> next week if you'll have me back. >> we'll try to carry on. >> we'll try to carry on. >> it will be tough. make sure you join us tomorrow squawk on the street begins right now. ♪ >> welcome to squawk on the street looking for some mild gains at the open jackson hole begins. a relief rally of retail the president's tweet adding to
concerns about potential government shutdown. europe is green. got a spike in short-term rate which is we're watching as well. the road map begins with president and the administration generating some more uncertainty. we'll take a look at tim pact on the market ahead of major global bankers. big game retailers on the move after earnings we'll look at what's hot today and amazon clearing two major hurdles. what it means for the industry in the past hour the president tweeted i requested that mitch m. and paul r. tie the debt ceiling legislation into the va bill that just passed for easy approval they didn't do it so now we have dems holding them up as usual. could have been so easy. now a mess speaker ryan will be on cnbc this afternoon at 1:00 eastern the point there was to be on the air at boeing it's not going to
happen today. >> no, this is going to be to me a celebration of capitalism and boeing is our greatest fact r to and instead of celebrating business and therefore talking about tax reform, we're back with the debt ceiling which i thought was by mcconnell on monday this is why tax reform doesn't happen distractions are endless we're going to shutdown the government because of the wall and now have this where mcconnell is he speaking to the president? we can't get anything done and this is not fake media speaking. this is media speaking you can't even challenge them on this for fear of being
considered fake media. i'm real media i'm not even from the media. here we are. we have a government shutdown we're back to mickey mouse treasury yields don't care you can really screw things up that's good because the companies all learned not to worry about washington and stay out of its way like the lottery winners should. i thought he would be out there talk front and center. no, we're back to this the real media is saying will
you give me a break. when i was a judge on the apprentice i should have say -- he was going by mr. trump then, i think we ought to focus more on picking the best. there's a good table circulating out of lpl research. hasn't always been bad for equities there's been 18 shutdowns since 1976 s&p has risen during 8 of them. >> make it clear i made that calculation once before and we had it i was taking vacation and i remember going back and forth with some people on air. to me that's absolutely right.
i'm just more concerned about the economic agenda and how it gets pushed out because i love the economic agenda. real media over here loves the economic agenda and that does get forced in 2018 now it's fine. >> your point is just lost opportunity. >> what. >> not that we pay a penalty of sorts. >> no, the stocks are going to go fup tup if the earnings are but it's the opportunity the guy that was the aparprentie judge you can't miss this opportunity. you can't. we ought to get back on our
game let's have some progress here because yes the market is going to go up and he's got those numbers. maybe the market will go up either way and he says that's fine but what an opportunity lost that's what it is. we have such a great opportunity. let's get this done. >> we'll watch that and we'll talk to ryan of course at 1:00 p.m. eastern on the retail front. it is a busy morning earnings out of tiffany, dollar tree, all of those names jumping on better than expected results. >> btf, better than feared not better than expected thought it would be down two but they had good numbers. that strong dollar problem so they're coming in and buying in american by the way president trump's headquaters and even
yes, sears that is incredible because they put the line about amazon, california, select alliances now selling. up ending, whatever he thinks he's up ending and it's all good. >> yeah. >> fierce comps although the shares were up, comps were worse than expected. >> wait a second listen, it's 12% decline it's excluding electronics they call them the new amazon survivors. >> you have to look. the top is going to be good
because tiffany has fashion. i bought one of the tennis bracelets for my daughter when she graduated. but fashion is good. william sonoma fashion merged with customer relations management that triumphs. i love the folks they are great but they need to think bigger there's many survivors if you come in underneath the pricing burlington, tjx, dollar tree you win. if you come in way above but have great customer relations management, you win.
there. using the cash to do that. just look at china and we're going to look for another brand to put into the portfolio and that will happen when it makes sense to take advantage of our infrastructure. >> all right so some of these names that come in this morning and see stocks up 20% are they hovering at the right time >> look. they should have been short. we got coffee down 25% that's what you're short, turkey i do think that what he did is rather brilliant he brought calvin right in the teeth of the depression in europe betting that europe would come back. you got the double whammy, the dollar is a tail wind and the sales in all parts of the europe, europe is on fire.
by the way singles day was a huge day for him because he's using alibaba which is up again today. there's a law. >> but i think this is a remarkable quarter by manning. he's ready with plenty of cash just looking for the right acquisition. 57% of the sales are still u.s i believe it's private label macy's kohls but he's also taking share from ralph lauren that may change but it's a remarkable job to step in and buy europe just when everyone else was running through europe. >> with all the retail green arrows today, jim mentions food and it's a tough morning for a couple of food companies hormel and smucker down.
>> both lowerring their full year guide smuckers is experiences weakness in coffee but it's all about retail consumer commodity, both on revenue miss. it's hard to have profits down 20% and still make sales flat and that's because your margins are horrible they are doing badly muscle milk is doing bad it may be more of a fad. i think it's a bit of a fad like that stuff my daughter drinks.
>> his point was weakness in advertising is packaged food companies under pressure from activists or anyone else look at margins and saying where can we cut? >> he said we were surprised that they were surprised 45%. 45% of their money was now online where the consumer is for adverse tiegz. 35 up from 30, up from 25 and look at this, best performing consumer package good company. he's on the wrong side of history there. i love the guy you know i love the guy. he's a nice guy. you know how i am when i say that. >> we'll talk about retail in a different sense when we come back amazon whole foods moves another step close tor to completion.
also a live interview with the dallas fed president dow and the s&p 2 day win streak but also down 4 out of 5 on the lowest volume in a month back in a minute you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.
live-streat the airport.e sport binge dvr'd shows while painting your toes. on demand laughs during long bubble baths. tv on every screen is awesome. the xfinity stream app. all your tv at home. the most on demand your entire dvr. top networks. and live sports on the go. included with xfinity tv. xfinity, the future of awesome.
and he just associates with people he's a great man we bring walter rob back and then you combine him with jeff besos >> yesterday we talked about these gangs that are coalescing. walmart, google, target, take on what you call that >> top of mad money we're at the tip of the iceberg with what walmart is doing why don't you call her she's like sure, there you go.
and i think that you cannot go without saying i'm moving from amaz amazon. >> you have been pushing this for awhile. >> now it's happening. >> that's because they listen to me and what i'm saying. >> aws is the engine of whatever profits amazon hosts. >> they're amazing for that. i urge people from google to get out from under the cover and start talking about what they're doing online again i think i'm not on his to do list in 2021 but have to tell you they have a shot here but google is in charge. their voice does not work as well yet but when it does you will no longer be speared to amazon products. >> business week has a piece out about costco
half of costco's members are amazon prime members >> they did not embrace the web the way it should have been. they have been very apologetic about that i always like this one time. i was on page 5 and they're late to the web and they admit they're wait to the lab. that's one of the reasons why they grab that premium multiple put i still like them because they make the money on the card. now he said people wanted the two day service and now pay the membership fee tart
target could be squeezed there it is the dark star but you know the empire could strike back being everybody else in retail >> i'll wear a black t-shirt i would do anything. >> when we come back we'll get cramers mad dash and countdown to the opening bell. take a look at the premarket looks good after wgaed be inack some of monday's rally yesterday. we're back in a moment the baby's room won't build itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner.
so she can plug into her dreams... and they'll have a new addition for their new addition. whatever you're working forward to, even if it's chasing squirrels, synchrony financial can help you get there. even if it's chasing squirrels, time's up, insufficient we're on prenatal care.es. 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.
we created the ripple: the doughnut in a doughnut in a doughnut. right away, it was a success. i mean, it really took off. what people don't know is that it all started with points from my chase ink card. i bought the ingredients, utensils, even custom donut cutters. wow! all with 80,000 points. what will you create with your points? learn more about the ink business preferred card.
quarter for this spin off. far better by the way than the actual parent that spun it off this is a remarkable company everyone wrote them off including me right here. they came on the show. i realized all of their stuff is in short supply. i have been waiting weeks for mine and that's not a plea to get mine mine just came in because i never do that stuff with companies but boy they have light models for those of us that have bad backs. >> interesting and geographically strong? the whole point is now all the global economies are working here. >> how do you like that? i could say that, you know what, this is part of, this is gdp play and that's something that the company always acknowledges. the gdp play and if it weren't for the fact that it's going up in price this company would have had a monster good quarter not to be -- i followed this
company at the beginning i was very negative on it. this was a good quarter. people were selling it i think are going to regret it. >> well, the parent had some obstacles to work on. >> yes, now they have a lot of cash the cash flow. they have returned it to shareholders regularly the company doesn't get it's due thg.r than from me and i ask for noin >> nice call >> thank you. >> we'll see if it turns around today. we'll get the opening bell in a few moments. ♪
everything ask dependent on the fact that the u.s. is a big swing producer and the production will not stop on a hurricane but the actual use of it, all of those places, most of these pipelines, corpus christie could shutdown by the way pioneer exporting a million barrels a month here everything is so changed now i'm more concerned there's going to be too much oil in the system and they can't refine it all. what a change from the old days. >> interesting land fall for harvey should happen sometime tomorrow chipotle did get a two handle yesterday. today goes to equal weight on valuation. >> that last incident just scared the daylights out of me
it's taco bell's turn even even though it turns out to be a little more chemically dry you have to wait again it's still fresh in people's minds. it's fresh i ordered it this week i have no problems with it but people won't buy a stock that has that kind of wrap. >> it's the opening bell headquatered in new jersey celebrating it's 90th anniversary. i want people to watch constellation brands it's the growth stock of this era and there's nowhere near a tie but the growth, the super premium growth stocks, not
unlike that by the way they have stalled. constellation has been the leader of this group let's see what happens he has done a remarkable job and he paid a fraction of what he paid for george clooney at tt e tequilla >> we need a cramer tequila. a cramer brand that you could sell. >> many things are in the works. many things are in the works but that's more lisa and she's too better making lisa's none better tomato sauce. >> also pbh, dollar general, if you look at the biggest losers, it's conagra, right? >> the food business is so hard.
oil going down i feel for anyone in that business no whaert what you do you're in the super market it's like being in the mall. the mall one of the things that happened last night was saying that taking share in the mall but what that may mean is he's taking share of the private label because he sells on amazon very short squeeze today that's a huge mistake. but yeah apparel good. anyone under amazon good but the food business, and the amazon deal closing for people hanging on to that >> we are coming up on the season where they're going to start selling what they make. >> they're going to have a lot
of close outs. they're coming in with cash. when you see, i don't know if they go to k-mart to get stuff but all of these department stores are so thrilled and they take the cash. they give them the goods we'll do it for a whole year and then home goods which is one of my favorite places >> it would be a great story. >> it's fantastic. i love that place. >> a couple of research calls in retail you mentioned lows. >> yeah. >> and then cuts dks saying we overestimated the companies ability to withstand. >> you know, manny is on the board and you go across like i
said to that intern that didn't wear a tie and i gave him a couple of bucks to wear a tie. you feel like you're at dick's sporting goods it's like four for one it's like buy one get three. you walk out there with like sacks of underarmour for the good quarter they did use the word promotional. >> yeah, they shouldn't have done that. >> i always like the chairman. they now have the advantage of having a ceo which is something like tiffany tiffany has a ceo. some of these places were absent we have to talk about that they pull bakded back a huge am of stock this was a place that would people would say epically
challenged that's further in. >> it would be amazing i think that it comes back here. it's just all good tiffany was fabulous that stock is going 1000 every one is getting better. they never destroyed it. they tried mightily to destroy it and they couldn't they did everything they could to destroy tiffany other than to start selling it and it could
not be destroyed that's a good brand. >> other fall outs from the dollar in gold up 2 out of 3. up 2% for the month as we said earlier out performed stocks for the first time. >> there you buy the stock of gold because he is in places challenged politically but he will go anywhere and does not fear it. >> down a touch today but what a run. >> it's been a run a lot of that is the weak dollar. >> i recommended that the person that won the lottery put 10% of their assets in gold keep it all in this country because fdr confiscated all the gold in 1933 so there. >> that's right. are you expecting any headlines either tonight or tomorrow
>> draghi has to start saying that europe is stronger. you mentioned that synchronized growth he has to at least acknowledge that they're crushing it when you see the numbers in europe, in spain, in italy, those sweaters are expensive and sometimes there is a line. or there's often just traffic in the store like madison avenue and i think the madison avenues of germany you can't get into the stores people have to start recognizing that they're doing so much better than us our president, here real media speaking our president should also talk about how europe is using it's weak currency to hurt us i know he's fixed on china i thought when bannon went to breit pa breitbart the president would expand beyond china but he's so
busy attacking the news. >> or mcconnell or ryan. he must have really liked the cloud. >> he did have that statement saying we continue to work with the white house advancing our agenda. >> i'd assume not be part of the conversation i'm busy watching ultimatea trap ahead you do a trade right now you go long alphabet and maybe buy puts william sonoma not going up after that terrific call wow. >> amazon is wow, 953. >> down more than 100.
>> the high was 1083. >> you know, the dollar trade is a little nippy i always joke you can eat off the floor of the dollar tree and then questions why you would want to eat off the dollar tree. it has the best candy aisle in the world. i fool everybody with these. >> place them strategically. >> yeah. they are every bit as good as the glasses i used to see the sun. the solar eclipse. >> don't look at the solar eclipse. >> no, my dogs can be blinded. nvidia was almost blinded by the solar eclipse. >> dow is up 35. we're going to go to rick santelli this morning. >> you look at tens and they are but if you look at one week it's
been a slow drift and it's been highly traded. if we look at a july start date you can see the oil market has been consolidating lower in a very orderly fashion but when you add a couple of months on to it what we see is coming down into the zone that held the low close of the year and it's still a lot of support down there. if we start to do much about the 227 to 229 look for some reversal action. now when we think about jackson hole, i think of one thing, you know, jim says we should get mario dragi to say how good things are i'll show you a picture of how good things are. here's a shot, the two year, just since april of this year, look at the drift in this. minus 73 i just don't see how anything could be good when you're giving it all away on the short end
now if we look at the currency, obviously a different story. maybe not such a good thing. it seems to like this consolidation in the euro to make up some ground but if you look at the euro versus the dollar there's been a lot of these sideways but it certainly hits all the turns and also euro versus yen a lot of power in the euro even though it's going sideways this may end up differently than the sideways down road action may end up differently but most of the guys on this floor follow the big trends because it's been working for awhile back to you. >> thank you very much let's get on the floor as well hey, bob. >> good morning, happy thursday, everybody. modest upside here, the leadership group here, retails make another effort. they tried it several times this year but they're making an effort retail stocks are up today
that's a leadership group. semi-conductors also trying to reassert itself as well as bio tech and banks these raul groups that did not do well but have been trying the next couple of days. remember we have that hurricane, that issue coming in texas, oil is down but gasoline is up now so i want to point out what's going on because the refiners are all to the upside because gasoline is on the upside. even though most of the complex is to the down side. we have noted this for a long time now the whole issue of the russell 2,000 being a sort of test for tax reform russell declined dramatically once the helthd care bill failed and started moving up and has been down this week and russell is up 1.3% and today is
outperforming. if you want to use it as the test for tax reform prospects are improving for tax reform upset about the retail beats they had a smaller loss. raised guidance. a lot of people are trying to argue that we're reaching some kind of bottom we heard this story before it is true that there is things that are showing some improvement. a glimmer of improvement we have seen sequential improvement in the first quarter generally. july the commentary has been strong overall yes there's modest improvement i like to look at it without walmart because it drags stuff around so much these are 112 companies. q-1 was down q-4 was only up 0.1% so yeah there's a improvement without walmart but the earnings are still kind of lousy so don't get
too excited about this q-2 earnings are going to be up 0.2% they were down 3.9% and in q-4 they were also down 1.6% so the trend is is definitely improving a little bit but still not that great overall. we're making an attempt to buy retail stocks again. the reason i like it is there's about 100 stocks in this and they're not quite equal weighted but almost equal weighted. it's not like walmart moves the whole index because it's there they don't have as much influence and you can see they have been trying to buy it and if they try it again in july it completely failed because all the earnings were disappointing in the first part and now they're better and they're trying to buy it again good luck. this is the same with energy you have a lot of nerve to buy at the bottom here we don't see any real signs of growth now bottoming won't be enough to get a big rally in most of these
>> we bounced off a one month low on monday. we're getting smacked around by trump headlines and that's true. one thing everybody has to be careful of is the headlines here the follow is continuing to drop so the average volume has been 7.1 billion shares that's the total volume of all of the exchanges on the average day of 7.1 billion shares. that's normal than you would normally get in august it creates a lack of liquidity that makes it easy to smack the markets around
and certainly mr. trump has influences on the market but it can be a little outside. right now the dow up 20 points back to you. >> thank you as you're talk about the president has tweeted yet again in this case about mitch mcconnell. he writes the only problem i have with mitch mcconnell is that after hearing repeal and replace for 7 years he failed. that should never have happened as the relationship between the president and leader mcconnell is just something people are trying to figure out. >> if we were to hack twitter and shut it down for a couple of days, we he would probably get tax reform. >> i don't think hathat's goingt happen. >> could you just shutdown for a couple of days until we get tax reform he's a good american he went to westpoint. >> the echo chamber that results from twitter takes up a lot of our time. >> it does i think mcconnell should take t instagram right now. >> do you think he knows
>> yeah. not the way we dealt with supply disruption in the past. >> no. >> where we were not there. >> it's huge between us and the regular ones that sit around the world. >> we had an analyst on day before yesterday that suggested there might be a there's a floor to crude until amarco goes public. >> i don't disagree with that. the problem is that if we start, do you know our budget, thank you rusty for this there's 43 oil companies that were sur vad and the budget is only down 1% year over year. they're not stopping so that whole price reduction, it meant absolutely nothing to us
it's 50, 42. >> so you need to see it. >> it's a little outvoted but you'd like to see it come down. >> it will come down like 2. >> there was a time i used to call the rig count in the 80s. that meant you drill one hole so keep in mind that the place where we export and the place where we used to make them those are under attack by this storm >> it's kind of like existent. >> jimmy stewart. >> yes. >> fl ulof surprises dow has gone into the red. so has the s&p we're down 16 points we'll get stock trading with jim in a minute.
duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than $1 a day! his secret? selectquote. in just minutes a selectquote agent will comparison shop nearly a dozen highly rated life insurance companies, and give you a choice of your five best rates. duncan's wife cassie got a $750,000 policy for under $21 per month. give your family the security it needs, at a price you can afford. since 1985, selectquote has saved over a million families millions of dollars on life insurance.
>> those are the three things that people think you can defeat amazon with. okay omni channel and value perception the value is probably on amazon but the perception might be a better value. >> how you get the stock up. >> unbelievable. >> disappointed in this market i thought that retail could be a leader but i guess not. >> definitely lost our early gains. >> yeah we really did. it's depressing. >> although ge and ibm are among the big dow gains. >> in the event of nuclear war you buy those two stocks. >> what are you going to tackle on mad. >> we have intuit.
synaptics. on how it can go up and epr when you go to a theater and add drinks, you have tequila, you watch the movie and there's crying babies, he is the trust behind those and also golfing. he's a genius so i shut up and let him talk. >> viewers have ideas for your tequila brand. denro loco. >> he does say everything is overvald but he's going to hurt the stock. >> we'll see you tonight mad money 6:00 p.m. eastern time when we come back dallas fed president live fm rojackson hole as the dow and the s&p have gone into the red we're down 16. ♪ there's nothing more important than your health.
so if you're on medicare or will be soon, you may want more than parts a and b here's why. medicare only covers about 80% of your part b medical expenses. the rest is up to you. you might want to consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like any medicare supplement insurance plan, these help pick up some of what medicare doesn't pay. and, these plans let you choose any doctor or hospital that accepts medicare patients. you could stay with the doctor or specialist you trust... or go with someone new. you're not stuck in a network... because there aren't any. so don't wait. call now to request your free decision guide and find the aarp medicare supplement plan that works for you. there's a range to choose from,
depending on your needs and your budget. rates are competitive. and they're the only plans of their kind endorsed by aarp. like any of these types of plans, they let you apply whenever you want. there's no enrollment window... no waiting to apply. so call now. remember, medicare supplement plans help cover some of what medicare doesn't pay. you'll be able to choose any doctor or hospital that accepts medicare patients. whether you're on medicare now or turning 65 soon, it's a good time to get your ducks in a row. duck: quack! call to request your free decision guide now. because the time to think about tomorrow is today.
2% from july of last year. what's the problem clearly it's prices. the median existing home price, 258,000 and that's up year over year and that's the highest july median price on record why are prices so high inventory down 9% year over year just 1.92 million homes for sale that is three years of falling inventory and compare that to newly built homes that are at a 5.8 month supply but we did see that very disappointing number yesterday on sales of newly build homes in july. so weakness in the housing market right now still a lot of cash. 19% but still disappointing for housing in july. missing on the streets prediction down 1.3% from june back to you guys
>> good thursday morning welcome back to squawk on the street david is off today markets look good in the premarket but we're down right now. we're watching obviously the beginning of jackson hole. a bit of a relief rally in retail and some tweets from the president. >> our road map does begin with that meeting of the minds. top central bankers and economists gathering in jackson hole wyoming discussing monetary policy and the economy we'll take you there live and hear from the dallas fed president. >> we'll talk retail all soaring on earnings. we'll dig through the numbers. >> plus a tropical storm heading straight for texas threatening one third of u.s. refining capacity we have those details as well. >> more than ten retailers releasing results since after the bell yesterday a lot of earnings movers to get to in retail just this morning, dollar tree,
and ambercrombie and fitch all good morning to you. >> good morning. >> so the question with some of these better earnings did expectations just fall too low or are we actually seeing a turn in the business? >> well in my opinion all the retailers knew q-2 would be better than q-2 and the market forget it was because some of the earnings numbers were ugly and yet still better than expected so the shorts got squeezed and they went up. so think this means we're going to have a q-3 and q-4 but consumers in good shape we're going to have a good consumer but it's not going to be a brick and mortar q-3 and q-4 like it looked in q-2. we're still seeing all of that transition and all the costs to go online. i don't think this means much more for the end of the year than what we already knew. >> so the characteristics of those that will outperform are
we'll see people outperform. they're doing the right things we'll see them beef up their game a little bit and they are making changes that will probably work and i think that will happen but i don't think that changes the trajectory of everything going online. we'll also see strength out of walmart in the back half because i think the things they're doing are work but that opportunity mean that they're going to have higher return on investment in the back half because they have the same problem everybody has is that a luxury story or something tiffany specific >> well, that is our call in terms of luxury goods being
better as a whole. we're recommending lvma as well as tiffany and what we have seen is very good product execution leading to better numbers however there's still an opportunity for comps to turn positive in terms of the disruption things have normalized what are looking for what is amazonable and deep value stocks tj max, ross, walmart offering discounts or luxury goods because in the jewelry industry you want to touch and feel and don't count stores out 77% of the people we surveyed still like stores so the future in my view is mixing digital and physical we are kaushlcautiously
optimistic. >> can't they get their share for six months at a time in other words it doesn't happen like clock work dollar for dollar every quarter >> yeah it pretty much does. it will be interesting to watch what happens i don't think that we're going to see much change when you see growth with these brick and mortar retailers the growth is really coming online and all the numbers show that and they see less and less coming out of the store and the store deleverages. that will continue to happen even if they look good through the back end of the year and amazon is's market share component just continues to grow i mean, they grow a lot faster than retail. we're all looking for places where amazon can't get you and there's few of those but there's places where they can get you less fast and off price is one of them and do it yourself home goods is ood but that doesn't mean they're not amazonable. it just means they're slower than other places.
>> is it a realization that others can effectively in group. >> i think people are concerned about walmart's impact amazon doesn't make money. it's hard to understand why their stock is as strong as it is so i'm never surprised when it drops back but people have looked at it and said walmart can be competitive with these guys. >> 5.2% growth they're both growing faster. how do investors know they're keying into this me trick for growth figure out whether it's better or worse than it should be. >> yeah, i mean, i think when we look at the industry as a whole it's double digit growth at least 20% or more 30 to 60% growth those are the benchmarks online. growing double digit at least and we're having a tough time in physical retail.
so traffic and getting people to walk into stores is difficult. that's a nice positive that's kind of the magnitude of what we're seeing. i think calling out caution regarding amazon, the shopping mall is a caution place because the mall traffic there is down anywhere from 5 to 10% as well as clothing and apparel. you can get really cheep clothing that's great for $5 liter literally that would be a key risk factor as we think about amazon getting so much share in the apparel market or is the market based on the evaluation of the mall based stores extrapolating that traffic declines for a long time to come?
half of online traffic is mobile there's a profound shift in the way people shop. having a phone in your pocket is basically having a store in your pocket so a real transformation with social media. the stock in terms of owning the stock you're looking at better than feared scenarios. on not great numbers but valuations have really come in so that's a key dynamic. longer term models again luxury off price is what we like but we answered the question with yes there should be expectations for continuation of negative physical traffic as well >> as we head into the fall is back to school a catalyst for retail sales >> it's not an event anymore not much happens and then we start worrying about the fourth quarter and i agree, i think the fourth quarter will see the largest drop in traffic in the history of retailing which was only last year's largest drop in history in traffic in retail.
>> what's the drop >> i think it will be high single digits and i think last year was about 9% and this year it's going to be that or more but it will be in that range and it's probably going to be last year. >> but you still say you can invest in some of these stocks they have market value at the moment. >> good discussion guys. thank you for coming to post 9 always nice to see you. >> plenty to watch in politics today. got new tweets this morning from the president raising heightened concerns aman is in washington watching that and what a possible shutdown would look like >> that's right as they continue the august repairs here at the white house the president is continuing a bit of a tweet storm this morning here at the white house as well.
they put out statements trying to repair the relationship of the profanity laced conference call between the two men in mitch mcconnell's private thought that it might not be possible for the president to undo the damage he has done to his presidency and salvage his presidency so yesterday the white house saying they were united on their shared agenda. that came at 5:45 p.m. at 9:45 a.m. the president was tweeting about mitch mcconnell here's what he said so far this morning. he said i requested that mitch mcconnell and paul ryan tie the debt ceiling legislation into the popular va bill that just passed for easy approval they didn't do it so now we have a big deal with dems holding them up as usual on debt ceiling approval could have been so easy. now a mess so the president passing the blame for a debt ceiling problem on to republicans. he also tweeted the only problem
i are is that after hearing repeal and replace for 7 years he failed. that should never have happened. those two tweets don't read like the president decided and also raising the failure in debt ceiling negotiations an official said they don't want to see any problem with the debt ceiling. they want to raise it. the treasury secretary wants a clean debt ceiling bill from capital hill the president this morning indicating there could be problems with those negotiations i asked the white house for comment on that and they didn't have any back to you. >> we'll come back to you on this and more. a quick programming note on all of this, the house speaker paul ryan will sit down exclusively to talk taxes, trade shutdown and more at 1:00 eastern time. >> when we come back we'll get you caught up on the latest
market move. the nasdaq is moving down a third of a percent otherwise fractional decline plus we'll take you live to jackson hole, wyoming. steve sitting down with robert kaplan his thoutsgh on raising rates this year. the president's economic agenda and much more. squawk on the street will be right back ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.
hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote.
my business is going to go to the cash rich companies. you can have cash and getting in the market >> yes i think that companies like microsoft and brookshire are in safe places and worried about companies taking risk at the cash balances. that's not case almost all in growth mode. what do you think this means the market is saying it can't
last keeping rates cool so there for marks are anesthesiaized what do you think? >> we talk about this growth profile that you mentioned so this growth profile is only in comparison to the weakness we have been seeing over the last several years so we're still talking about moderate conditions at this point specifically in the u.s. we're still talking about a sub 2% economy so a very heightened level of concern as they're meeting to talk about raising rates and potentially slowing
the pace of this moderate accelerati acceleration >> this has come up every time for the last couple of years >> is that something that you're watching. >> it is but i do agree with the previous assessment that it is a lot of rhetoric in the marketplace right now but it causes uncertainty and any time we have uncertainty, surrounding the debt ceiling coupled with the uncertainty that we're seeing in the global environment this can spook the market so certainly the on going rhetoric, the threats of default the threats of government shutdown, this is never a
positive direction or positive communication to the marketplace and so at this point we would like cooler heads to prevail among politicians. some sort of negotiation and clear transparency of exactly how they're going to deal with raising the debt ceiling which we know eventually they will do. >> our viewer wants to know how you think at these levels and whether you see it's changing. we invest all around the world and the misnomer that low interest rates equate to a high multiple, it doesn't low interest rates can portend lower growth rate. that's bad for equities. equities care about growth more than interest rates to we think this should go up.
equity investors are the risk. when people come with money they have to raise money we inquirities. that's what is hurting the market it's not what the market interprets it at. >> that's a good take. really interesting thanks guys. we'll see what we get out of jackson hole the next couple of days when we come back, tropical storm harvey headestigd raht for texas threatening u.s. refinaer industry in a big way. squawk on the street will be right back
watertown massachusetts as originally reported. it just illustrates the importance of checking your tickets because there were six $2 million tickets, won or boug bought more than 30 1 murder in the second degree -- $1 million tickets. here's the winning numbers did your check your tickets? i'm sure jim cramer would like me to mention his big advice in case they're watching. why wouldn't they be watching cnbc number one, take it as a lump sum pay out. number two don't get reckless and number three pay your taxes which is pretty good advice even if you didn't win a big jackpot.
>> we'll come back here later today. watching the powerball numbers the energy industry is closely watching this developing storm that could become the first hurricane to make land fall in texas in nine years. jackie joins us we details on how it might impact production and refining. >> good morning to you, carl waiting to see if this does and that means that prices could see a spike. they're lower now.
on the refinery sides it represents less than half of overall capacity so it's significant. houston, texas city, baytown, new orleans, baton rouge, they represent the highest in capacity category 2, 1-2 weeks and category 3, 2-3 weeks to get back to normal so while it could cause a strike it may not be as dramatic in the current environment. all depends on the damage. we're about to finish out the summer driving season that didn't turn through the amount of gasoline inventory expected if it just passes through and doesn't have a huge impact we need to brace for lower prices
after labor day but if the storm is severe it could be a temporary game changer what we know the national weather service forecast 75 miles per hour winds and 15 inches of rain harvey is about 400 miles south of port mansfield texas but could make land fall tomorrow. companies are being urged to put emergency plans in place and start evacuating depending on the severity of the storm. prices are down but they are trading higher back to you. >> jackie, we'll watch that. thank you very much. when we come back we'll take you to jackson hole. steve sits down with dallas fed president robert kaplan. president robert kaplan. almost one hour into the trading i'm here at the td ameritrade trader offices. president robert kaplan. almost one hour into the trading steve, other than making me move stuff, session. squawk on the street continues in just a moment let me show you.
okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade.
mud slamming into the small town was the equivalent of a 3.0 earthquake you're up to date. that's the news update at this hour back to jackie this time for the eia inventory report. >> we're watching energy prices closely and the eia out with gas numbers. that was exactly in line with the expectations the five year average is about 54 you can see they were trading about 297. they are trading in the same place after the report because it was in line people will be watching the weather very closely and of course the impact of tropical storm harvey as well when it comes to gas prices. back to you, carl. >> all right i'll take it jackie, thank you with that we'll send it out to the kansas city fed's annual economic symposium in jackson hole steve is there among the moose and central bankers sitting down with a very special guest. good morning.
>> now we are still waiting for the monetary boost to appear proceedings begin this evening with the opening dinner. thanks for joining us. >> good to be here steve. >> i have to start off with this news now that the hurricane bearing down on your state the state of texas. >> so we play a key role from a financial point of view and before a storm like this banks and others going to want more cash so we're geared up to serve those needs. the other thing we do is particularly in our houston office and along the coast we work closely with all the first responders our concern here is not the initial storm as much as the understooding that is likely to occur. so we're prepared that they're going to be -- there's going to be a real risk of flooding for several days it could disrupt refinery
infrastructure and other infrastructure so our job is to work with other government entities to make sure that we help with the response. >> are you doing that now? going out to the banks right now? >> we want to be responsive to their needs but normally what will happen and is happening in a situation like this, thank bs want to build up cash because they don't know what the transportation logistics will be and we're working hard to serve those needs and to respond. >> how about the potential economic impact especially in the refining capacity? so much of which happens in the southeast coast. >> i'm confident that we have the ability to recover and we'll be prepared to experience some disruption over the next days and i'm confident that we'll work through it and work with our partners to help respond to
this. >> from one storm to another that's looming in washington, the possibility of a government shutdown next month? how does that effect or alter your plans for what the fed should do with interest rates and the balance sheet? >> so the most pressing issue is i have been vocal saying i think we should begin the process of letting the balance sheet run off soon as soon as the september meeting announce that. i'd still be optimistic it's going to happen. this is certainly something we'll be monitoring very closely. there is a timing issue. could that keep you from reducing the balance sheet. >> i don't want to prejudge how the timing is going to unfold. i think the key is we have to
monitor it closely and it will be a factor we should begin it as soon as possible. >> you had conviction when it comes to the balance sheet what about conviction about another interest rate hike this year >> i said publicly as you know that i want to be patient. i have been a strong advocate. we now sit at the 100 and 125. i'm confident we're going to grow thisser year and take more slack out of the labor market. the issue is about inflation and we're trying to weigh the content between the factors which could be creating more inflation and some of these muting pricing power of businesses and i'm not saying that we won't act by the end of the year but i want to be we
have the ability to bepatient here and see how the forces unfold before we make a judgment >> how deep is the crisis within the fed when it comes to the ability of the issue to create inflation. >> it was something that central bankers always thought they could do it's a conflict between the cyclical forces and structural forces that are powerful and
new. it's historically low. it's a new phenomenon i spend a lot of time talking to business people and out and understanding what businesses are seeing and i think when there's a conflict it pays to be patient. >> you talk about people around the table. economists and business people how do you feel about the possibility that the next fed chair could be not an economist but a business person. >> i'm not going to comment on any specific individuals or changes other than to say the great thing i learned about the fed, i've been around now two years at the fed it's a very resilient organization
we'll work effectively and adapt to it and we're a very resilient organization so i'm confident about our ability to be effective. >> do you think janet yellen should be reappointed as fed chair? >> i'm not going to comment on that other than to say i have been impressed with janet yellen and she has been an excellent leader i find her very good to work with great listener great at mobilizing the group to make a decision. i have been very impressed with janet yellen and you didn't do it >> i'm not factoring in any of these proposed policies.
i may but here's why i'm not you and i talked about this before some of the policies will be positive for gdp. regulatory review is positive. infrastructure spending. tax reform the best approach is to wait for them to develop and be inactive and i'll factor them into my thinking and my forecast this year doesn't make any assumptions about new policies being enacted. >> there's the bill the president has endorsed which would cut immigration in half. what kind of gdp effect did that have >> well, one of the big challenges we face is our
population is aging and our work force growth is slowing and participation rate was 66% it's 63% today also there's a big skills gap we need to grow the work force if we're going to grow gdp so i won't get into what type of scoring makes sense for immigration. but i want to emphasize that immigrants and their children made up over half the work force growth in this country they are likely to need to make it up over the next 20 and one of the key confidences is our ability to take in people, including my grandparents, asimulate them and make them
productive members of society and that's been one of the keys to the country and i would be low to see us lose that distinctive confidence. >> it's another long-term type question. >> you heard me say, we have to see how. if you ask me today i'd say closer to 2 than to 3. that's a change. if you ask me what the neutral was five years ago or ten years ago, ten years ago i probably would have said closer to 4 or 5% today i think it's in the 2s. what does that mean? we're probably not as accommodated as people think >> all of that wraps into a big question which the fed discussed at its last meeting which was current market levels.
the stock market levels. the rate policies. are you among those who share concern and worried about it as the fed perhaps with draws stimulus >> my take on it maybe a little bit different. rates are lower. pes in the market are higher that's certainly the case and the thing i'm concerned about is not so much market value i'll concerned about build up on excess debt and people owning significant assets that's the same as leverage. so far i don't see them to a point that's concerning. one of the reasons i don't see them is we had very tough regulations for the big banks.
one of the things i'll be watching for those excesses. i think it's important that we keep strong stress testing and i'd be a strong advocate for that. >> my colleague back in new york has a question for you. >> all right. >> hi, nice to see you the president three risks this week either through his rally or twitter account. with drawing from nasa which he threatened to do he called the debt ceiling discussion and raising it a mess and also threatened a government shutdown if he doesn't get the funding for his border wall. of the three which one scares you the most in terms of a near term economic and market risk? >> well certainly two and three the risk there is buy niinary. i have to monitor that but one i am concerned about and i speak
out a lot and in particular our trade relationship with mexico our imports from mexico are primarily, about 70% based on our work, intermediate goods that means they're not final goods, they're goods going back and forth across the board as part of integrated supply chain and logistics with u.s. companies. if we undermine those relationships and logistics and supply chains we'll make them less competitive jobs have to be globally competitive and i think our trade relationship with mexico allows us to do that nafta should be rereviewed and negotiated and they're ready to do that but it has to be done in
a appropriate way because they're essential. i believe the u.s. competitivene competitiveness. >> global growth and one of the great developments has been we're sort of fierg on all cylinders at a global standpoint how has that changed your forecast does it make you more optimistic are you adding points to gdp when you look out ahead? >> there's no question that better growth outside of the united states creates tail winds for the united states but also highlights that there's an opportunity for the united states so globalization has been blamed for a lot of the issues in this country and it's been blamed for things maybe it's not responsible for it it's an opportunity for the u.s. to be more integrated with the rest of the world and create
jobs here and create more growth so i think and i'm glad global growth is better i see it as an opportunity for us in the years to come to create better growth in the united states. >> back to you guys here from jackson hole. >> great interviews. great live shots thank you for that steve in jackson hole. we'll take a quick break here and take a look at stocks at this hour up 23 after dipping briefly into the red coming up an interview you do not want to miss today at 1:00 eastern time we sit down exclusively with house speaker paul ryan to talk about a lot of things we just discussed. squawk on the street continues in a moment. the channels you love. your favorite shows and movies. making your iphone into more of a... oh my tv is ringing.
i sat down with reed hoffman, venture capitalist at microsoft. we talked valuations, diversity. the next big thing that people aren't actually talking about. that's coming up top of the hour "squawk alley. don't miss it. i know when i hand them the keys to their first car it's gonna be scary. but i also know that we're gonna have usaa insurance for both my boys. it's something that they're not even gonna have to think of. it's just gonna be in the family.
stocks have turned positive again. let's go out to the cme group in chicago. rick santelli with the santelli exchange morning, rick. good morning, sarah and good morning beaterman, beaterman, beaterman, charles thanks for taking the time >> aloha, ricky. >> listen, from a company perspective, let's get inside the big s&p 500 companies. from their perspective, from the inside looking out, what's going on with cash, cash buybacks, capital spending what insiders -- are you seeing any patterns, charles? >> we're seeing a significant slowdown in newly announced corporate buying new buybacks are down. new cash takeovers are down. and recently just with second quarter numbers coming out,
capital expenditures for the first half of this year are at the lowest level since 2011. so companies have -- >> that's important. that's why i watch the durable goods numbers to see exactly the proxy for capital spending dig into that. so give me more detail on that aspect and the trend >> also what are companies doing with their cash? nothing. cash is growing. so -- and insider selling is up. companies have lost confidence it looks like in the economy or in the leadership or something or other >> to be fair, charles, to be fair, i always pay attention to what insiders are doing. and their track record over the last six or seven years hasn't been great when they buy, it doesn't always go up or when they sell, it doesn't always go down you seeing anything different this time? >> a huge -- insider selling is, last time it was this high, maybe '09. it's spiking in august
you know, august is -- there's a lot of not necessarily bullish things happening in august from insider selling spiking, corporate buying at very low levels and we're also seeing outflows, significant outflows from not only -- >> so you now we're switching it investors are pulling money as well how big is it. >> well, could be the biggest since '09 -- not '09, i want to say -- '11 no, '13. the outflows are just accelerating it's not just from mutual funds. it's from etfs as well, and money is not going into global equities >> do you think the markets are calibrated correctly for the two issues you've been bringing up, insider/outsider do you think there's more room any advice for investors at this point? your final thought
>> i've sold some stock and turned a little bearish amid all these numbers. if these trends continue, it can't be good. >> got you charles, never minces words. thanks for your thoughts today carl, back to you. >> all right thank you, rick santelli squawk alley is coming up next don't go away. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.
welcome back to "squawk on the street." real estate is standing out at the best performing s&p 500 sector and by a wide margin. nearly all components are positive with kimco and simon property among the leaders now back downtown for the start of "squawk alley." >> good morning. 9:00 a.m. in jackson hole, wyoming. 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪