Transcripts For CNBC Closing Bell 20170711

Amazon prime day a look at the Ripple Effect amazon is having on consumer goods companies. By the way, the shares of the company slightly lower in the session, and battle of the home echo wars. Goggle and amazon are slashing prices on their devices. 50 or more in some cases. And its its the final countdown. Were gearing up for big reveal of americas top state for business we are anxiously awaiting the result, and we will bring it to you later on closing bell. You probably saw scott cohn reveal that georgia was number two a little while ago reporter but we knew he wasnt in georgia. We knew he wasnt in georgia. We just dont know where he is right now, but well find out here on closing bell today lets begin on capitol hill where our ylan mui has the hills reaction to the emails released by donald jr. In relation to a meeting with a russian lawyer who claimed to have damaging evidence against democratic president ial candidate Hillary Clinton. Reporter Senate Majority leader Mitch Mcconnell saying that he has full confidence in an investigation that the Senate Intelligence committee is conducting into possible connections between russia and the Trump Administration, and now apparently the trump family as well. Mcconnell just wrapped up a News Conference with reporters saying he was sure that the committee would get to the bottom of what happened i caught up with republican senator john kennedy in the hallways here, and he said he was worried that this email investigation would be a distraction and throw a wrench into the legislative process clearly a distraction, but the president fired the fbi director he didnt fire the fbi the fbi is work being diligently to get to the bottom of all of this. Reporter a few other headlines from mcconnells press conference he said that thursday is the day that senators will unveil their new version of the Health Care Bill he also said about the debt ceiling that they plan to hopefully have a vote on that before the august recess and they will have a little more time to do that because he also announced that they will be delaying the august recess by two weeks. Back over to you guys. Thats what we wanted to ask about. You saw the market originally spike lower this morning in all the email stuff now its moving upwards and it sounds like this is the point that art cashin viewed that they view the august reves move that perhaps theres an indication for some for that agenda. Lawmakers need more time to move on key policy items such as health care and nominations and mcconnell blamed democrats for stalling that process. Their complete lack of cooperation is the reason they need to stay longer, but well have to see if two weeks is really going to make a difference. Okay. Ylan, thank you. Lets get more on how this is affecting market behavior today, and our Closing Bell Exchange from hightower is with us at most nine and so is Kenny Polcari and Rick Santelli checks in from chicago at the cme there. Kenny, we were talking about this earlier it would be pretty clear that the algorithms read the headlines about the release of the emails and down went the market and it left the humans scratching their heads wondering what the big sdeel about. Thats absolutely true. Technology is fun and cuts both way. You have smart a lg os that do nothing but read headlines and if the word is perceived to be positive then they initial buy orders and if its perceived negative they initial sell orders everybody said what really happened, and was the headline at all even that negative . Im not sure that it was so, so negative, but what happens they kick it into high gear and they take advantage because the market is out of line from where it should be and look what happened they supported it right at 2415 and then they take it right back up again. I think the socalled smart a lg os are the new dumb money, what do you think . I disagree. If you look at where money is being spend on artificial intelligence, computerized programming, all in the hands of amazon, google, facebook they are investing heavily in picking stocks where i think the fundamental analysis of stocks is going to be gone in 10 or 15 years. Already huge investors are making big bets on algorithms picking stocks based on trend following, based on sentiment and based on emotion youll see hedge funds and private equity funds and all kinds of funds spring up in the next five years specifically. I think id take the other side of that thats all im saying. I think theres still a place for fundamental analysis for sure on a day like today you see longterm effects on a piece of news like this dont really matter when pepsico beats numbers, when people still have to brush their teeth and fill their hair and turn air conditioning on theres still Consumer Staples and so on and longer term more and more stocks will be done by stockpicking computers. We could spend a whole hour on that. Im not saying its a good thing. Its probably an opportunity for those who can get in the weeds with companies and pick apart Balance Sheets and pick good managements and find the uncommon value, but im just saying more and more that trend is continuing. All right hey, rick. Play with that all day, im sure, but, you know, while we saw this selloff in equities, we didnt really see a rush to any of the safe havens per se. You did see yields coming down but that was mainly i guess the strong threeyear note action and the dollar index is hovering at year lows right now. The dollar index is kind of the and having a hard time holding ton to a 96. If you want to see a real currency chart, look at the euro yen or euro pound the euro dollar doesnt look bad either the dollar is doing better against the yen. I guess the currency that is of least investor priority to own these days is probably the yen which is very fascinating considering they have an export economy and they are working on a deal, trade deal, of course, with europe, also driven by export economies whose biggest economy germany export cars has done japan this is going to get very interesting to be sure, and do i have to weigh in you know, kelly, i agree with you on a lg os and computerized trades its ultimately going create a lack of volatility 99 of the time, and the other 1 its going to be rip your face off volatility but to be fair we dont know how many they sold on way down we dont know how many they bought on the way um for all we know they sold x on the way down and bought three times x on way up and actually made money no matter how you slice it, whether you like it or not, a lot of people on the floor 30 years ago did not like electronic trading no way tstop walmart, amazon, its a disrupter doesnt mean that its a different style. If you look at the fx markets, you want to talk about the share of computerdriven trading there. Its like 80 . Anywhere, just thought it would be fun to raise the point. Boy, theres something to think about for another day. Thank you guys, appreciate it very much. Thanks, bill. Thanks, kelly. Your thoughts on todays market action. Another big story today. Some of the amazon prime day a look now at the details of this day starting were you, courtney hi there, bill. Amazon shares are slightly locker the third prime day in a row that weve seen that pattern, but theres no indications that theres any cause for concern. 12 hours left for this years prime day and the cnbc had millions shopping by record levels at 4 00 a. M amazon devices, including its echo family and those fire tab lets are among the best seller. Discounts range from 30 to 60 on the tablets but hundreds of thousands of deals on a very wide variety of goods. The latest products with very steep discounts and have already should out a 23 considerate gold plated watch, thats 95 of and then youve got to vr head set with a controller if you want it, too bad. Its already gone. Fourpoint usb charger and also gone hays are been feely. The price of comparison side pride clag when he looked at the top ten deals. For smarters 40 of the deals were sold only on Michel Samson so that means you cant price compare on any other site. Now 20 of the deals were actually cheaper elsewhere this is even after shipping and tax. The remaining 40 of the deals that he looked at amazon did in fact have the lowest price by avere of 18 now analysts have been expecting sales to grow by as much as 56 over the estimates from last year or to as high as 1 billion on this prime day. No glitches have pulled down the system or app. We have catch point systems watching that for us today if that chanchings. Before you are get to eric, hang on there. I have a feeling about prime day, for example people are taking them to task they dont always have the cheapest prices. I dont think a lot of people shop amazon for the cheapest price, not that price sensitive. They are convenience conscious i speak with Michelle Carusocabrera about this all the time the personal consumable products like your face washes or shampoos where the margin is pretty small, she knows shes ordering those for convenience but not price but some people see 89 off and think of have to have it. A lot of these brand numbers thirdparty sellers and tom were in theful with a y you. Courtney, thank you lets get over to eric who claims all this Comparison Shopping is zapping out productivity. Kind of a fun exercise. We were concerned how much time and productivity people would spend on amazon rather than doing their work we estimated the value of the lost work is roughly around 10 billion. Think of it this way prime day lasts a full 30 hours, but people are only in their office for about a third of the time its estimated there are 85 million prime members. Lets just say they spend one minute as new deals roll out so you combine those numbers with gdp data and youre looking at 10 billion of lost worker time focused on amazon. Thats an estimate not all prime members will be shopping from work, and we mention none nonprime customers. The 10 billion might not be stolen from work it could be the daily bleed from everyday time wasters. Maybe its facebook or twitter or watching wimbledon that will actually suffer because of amazon. Youre nodding your head. I thought the same thing. There are plenty of reasons and things that distract people from their task at hand at their desk, but this is just one of them youre a lot of fun at cocktail parties, arent you, eric . Dividing it up and figuring out minutes. And i heard some people golf in the middle of the day, too, so amazon prime might take away from that. All right touche, very well done. Bye, bill. Seriously are we looking at a situation where people do have this loss of productivity . Well, 10 billion isnt a huge number either, i mean, in the context. In the scheme of things, youre right youre asking me, you want my take on it, bill we ask the questions. You answer the questions. Thats the thing. Right, theres always some event going on 10 billion is not a huge number on any driven day when you think about the gdp. If only 1 billion is getting sold, theres an inefficiency there where people are spending time in their computer where i may have been quicker to go down the stre and buy the shampoo in the store there are special deals today. It will take a lot more of the third year of amazon prime to figure out what is is worth peoples time in the long run . I think this is here to say. Look at all the free advertising they are getting from doing this. Eric, thank you you got it. Meanwhile, our next guest is finding that Consumer Packaged Goods Companies are reallocating ad spends to digital versus traditional media. Emarketer estimates that the digital ad spend will hit nearly 7 billion this year, about 2 of the total market. One of the companies that could benefit from this shift is amazon joining us now is the man behind the report okay lets get to the point here sir, and thanks for being here. Thank you. Amazon is a major threat to some of the Consumer Brands that we most are aware of pepsi who reported earnings this morning and all of the others, right . Right, exactly. I mean, the crux of this report really came from trying to understand what are the latest trends in the tressing market as it stands today and the Procter Gamble of the world, pepsis of the world, biggest were seeing pressure across thebert because they have a disproportion at amount of their dollars marketed the strength of their business which weve seen historically and thats distribution and now they are being disrupted by amazon, they are not really fighting back on that which is real putting amazon this is not new news and the fact that budgets are moving in the way that they are is concerning. Were showing you the biggest names and marketers. I want to make sure people didnt miss the point you just made we talked earlier about how viagra is not going to be advertising as much. Youre saying some of the biggest marketing spenders in this country will be pulling back because of amazon explain that. Theres two points to it. One, we could be seeing a downward pressure on the aggregate advertising dollars spent across the board which is 1 to 2 of gdp. Historically that number could see downward pressure of cpg and Companies Pull back in the way that we think that they may. And the second on amazon, if they are not investing in their brands the way they used to. You request expenalty m to see that as you put it, consumer packaged goods may be the new dialup thats the ultimate insult. Wow look, i mean, i was trying to catch a headline with that its true in the sense that the dialup companies focused on cash flow above growth, above all else and thats what the cpg Company Seems to be doing as well cash flow above growth. Yet another amazon disruption great to see you again. Thank you. Thank you. Were headed to the close for this tuesday with about 44 minutes left in the trading day. A lot of volatility, but were just wondering if it was really necessary. The dow is up 18 points right now. Microsoft is the preparing to make a big investment in Rural America. Well take a look at their plans as well as who is against it thats coming up next. And on the heels of aaron judges home run derby win last night, a new etf is hitting the market and involves baseball and the three other major league sports, too. Well talk about tips makeup and the sports rhett van behind it ceokh out to the show on fabo, twitter or on facebook what do you think about all of this youre watching cnbc, first in business worldwide look at me. You used to be the yes guy. What happened to that guy . Legacy technology can handcuff any company. But yes is here. So, youre saying we can cut delivery time . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. More than 23 Million People in Rural America have no hack ses toss broadband and microsoft is looking to change those numbers. Josh lipton joins uses from San Francisco with the new details josh thats right, kelly so the news is coming as a bit of a surprise but by 2022 microsoft hopes to bring bebond connectivity to 2 Million People in Rural America as you mentioned, theres 23 Million People living in Rural Communities without reliable high Speed Internet service. Microsoft wants to change that by improving access through whats called tv white spaces or unus channs used to liver Broadband Access they will have the system up and running and brad smith talked about the issue today. This is an issue near and dear to our hearts at microsoft, Broadband Connectivity for the nation were not a telecommunications company, and we dont want to be one. Were not a broadcaster, and we dont want to be one either. But we are a Technology Company, and were a Technology Company that for 42 years has focused not only on building better products but on creating bigger markets. Microsoft tells cnbc its financial commitment is substantial but emphasizes its not seeking to profit from this project. Microsoft executives also talked about the role that the theres googles project loan and facebooks drone projects that hope one day will provide web access across the world. Thanks very much. It all sounds good and despite the microsoft move there is not a clear exact broadband path for Rural America. A former chief of staff himself at the fcc joins us now to talk about all of this. The first thing i thought of was the the earliest days of broadband as they gan the rollout. You know, we talked about how expensive it was, and the rural markets were just left out because the return on investment was just going to be so better is it better now or why microsoft is purr soog this now . Why did you think microsoft is doing it for precisely the reason indicated in the last second is that the more people who have beband the more people who can use their products ant bigger the market can be. Right. And they are not the only tech company as your reporter indicated, google, facebook and Satellite Companies including elon musk are thinking about trying to get into the business and expand it that way. Thats now kwai though . Does the cost offing a significance didnt years ago. If youre laying fibers or pipes, youre going to areas large and left dense, that makes it really difficult. The broadcast industrys response to this has been interesting because they are clearly not happy. Yes. It puts them in this odd position of having to defend not using this spectrum. Is the there any prospect that the broadcast industry itself will use the spectrum towards the same end that microsoft is pursuing here . Well, there are a couple of things going on here remember, the white spaces in the analog world of the past were very needed to be protected. And in a Digital World the threat of that is rest the become, say and particularly as you if to more densely populated area and microsoft wants the white spaces, not just the rural. Broadcasters are a little bit understandably upset microsoft could the have participated in the most recent incentive auction and paid broadcasters toss buy these stations they chose not to do this and are going to fcc in pursuit to policy around for a while including when i was doing the International Broadband plan, white spaces lets call it a hopeful way of utilizing spectrum to bring better and more affordable broadband to lots of people. What about the other things that josh mentioned, the other ways of reaching youll area, the Gee Whiz Technology and using drones and everything like that is that likely, or could that disrupt microsofts plans . Well, look, one of the things that ive seen certainly in the couple decades that ive been fwolg, theres all kinds of promises and specific called call calm that had a neck crisomewhat it worked and now cma and qualcomm are world leaders. And theres rul this technology seems to be working out in a light like a j. You never know if last month the miss makes a flute of satellites, it could make in aural obsolete. Good to see you. Larry levin from gigu joining us today. Heading to the close, the dow is up 15 points, sort of like Fantasy Sports meets the stock market thats one way to describe the new etf for sports nance that hits the stock market today. The sports vet pitching that fun joins us next. And speaking of the big brands pepsico beat earnings and another example of how the cold soft drink sector is heating up. A look at whether the mpies coan behind pepsi and coke are the real thing stay with us we, the people, are tired of being surprised with extra monthly fees. We want hd. And every box and dvr. All included. Because we dont like surprises. Yeah. Like changing up the celebrity at the end to someone more handsome. And talented. Really. And british. Switch from cable to directv. Get 4 rooms with hd, dvr, and every box included for 25 a month. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. 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 nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont 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. Welcome back, everybody. I wont mention it probably a good idea. The dow is up three of the four major averages in the green nasdaq with a 17point gain and the russells up three. Shares of jc penney moving higher the companys cfo, chief executive officer, officially steps down hell remain in an advisory role through early august and the retailerss Accounting Office will handle things in the interim. The stock is currently up about 2. 5 after being down last night. The major league allstar game is tonight in miami theres a new etf that tracks sponsors to the four four Major Sports League and its called fanz and its looking to score with fans and everyday. I thought it was a play on f. A. N. G. Might be. But fanz for the fans it tracks 66 sponsors of pro baseball, basketball, football and hockey joining us is jim kozimor. Hello, kelly and bill. Welcome, sir. This is a new etf and a new company. Yes. And nobody is doing this yet. Nobody is doing it. What does the market need heres what we need to do. Find out a good way to track whether or not being a partner in professional sports works theres a number of ways we try to do that we built about 25 indices to try to narrow it down and we eventually came back to Revenue Growth within professional sports when you look at the four major leagues, you see that Companies Continue to be a part of them. Even through a downturn in the market the leagues tend to grow in ref now and also these partners, the Corporate Partners who want to market their brand find professional sports fans are the best way to get their brand name out there. Wow. Wow. Youre a sportscaster, not that thats doesnt make you a bad person but youre you know what youre talking about ive been in sports for about 30 years. Im aware. And had a chance to see some of this stuff and you see the growth why do Companies Keep want to be involved in it the work and the pro sports sponsor index gives you a look into that. I keep hearing that viewingship is down because they struggle, like we all do, with distribution changes and all these things that are going on so are these Good Investments at the same time . So because these investments are so costly and thats a great point, what you want to see for companies is what is their tracking mechanism to see what the return on investment is and the views are much tougher to get, they need far more internal rules and when we see them continuing to go back to pro sports, even in a downturn in viewerships, theres different ways that the viewers are seeing things and thats enhancing their business and thats what the index tried to track and we think weve done a very good job showing through a long course of time that these Companies Continue to grow their business because of their attachment to professional sports. The name on the screen. A lot of people are familiar with the big financial sponsors, those kynes of things. Amazon, give us an example of why thats included in this index or sysco. Excellent question. Amazon, a huge company how are you going to turn that big ship or grow that bpie when its already so large. Reporter amazon said we view professional sports viewership as an area were not in. Because they are a partner for that thursday night content . Exactly they become part of this and you get exposure. This is also instructive. Theres sportsrelated companies not in the etf, msg, the owner of the knicks and Madison Square garden, they are not in there, why . When with were building some. Indices we realized they were local or regional plays. We wanted to capture a National Market and best way to do that is take a look at a company, say a papa johns who wanted years ago to grow their business they went in with an investment in the National Football league. Their investment that helped them grow their business and build more stores and doubled down in professional baseball and they will grow even more. I think you know the knicks arent a good investment and you look at the team and the leadership and they say we dont want this. Buy low. And loy the people ask the same question, why not the locals or regionals that are big. We wanted to look at a national picture. Were looking forward to see how this does when it trades. Thank you both. Jim kozimor from nbc sports group, and he does the earthquakes do you yell score when they do that. I do all of my crazy sports up there and i hope we gave you what you needed here. Fun stuff great stuff. Time now for our cnbc news update and heres sue herera. Senate republican leader Mitch Mcconnell announcing a delay in the senates planned august recess until the third week of the month to provide more time for them to work on legislation and approve nominees. Weve got defense authorization. Weve got debt ceiling weve got the eda user fee and other important legislation that we need to address and we simple as a result of all the obstructionism dont have another time to address all of thesishous. A dealt ann, flight from orlando made an Emergency Landing last night the windshield cracked and the cause is under investigation customers at chickfila showing up wearing anything cow like will receive a list of free items. The promotion takes place until 7 00 p. M. Tonight. Thats the news update, and look, eat more chicken we get this from chickfila there you go im there im there thank you sue. 1. 6 Million People last year participated well see this year. Thats hey lot. Thanks very much, sue. 25 minutes left in the trading session with the dow up 25 points. Right now joining me on the floor of the new york stock exchange, my good friend from rosenblatt security. I said to myself, i hope i didnt get you on the floor. What did you make of today, the eat mail flash crash these not pretty. Is that just the a lg os going craze . It wasnt that huge of a move these are the kind of things, they get a little bit of news and will move the markets. And now weve come back here. And we sort of followed the trend of what the market felt like all through the day weve been kind of holding here. Were seeing as we go into the final halfway, seen some sell orders a lot of we paired off were seeing. Do we expect much from the yellen testimony the next couple of days . Well be looking at t. Earnings coming out starting with the financials and that will tell us at least about that sector and, of course, yellens testimony. You dont anticipate surprises, but you have to be on the lookout. You cant just dismiss it is as irrelevant. Thats for sure. Thank you, sir. Gordon charlop. Thanks, guys. The dow hanging on to a 27point gain and in the red most of the session and now positive and the s p up a point and nasdaq up 50 the market dock a dip today. Coming up, what the white house has to say and how it could affect the business of the president and the coun hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. [brother] any last words . [boy] karma, danny. Karma [vo] progress is seizing the moment. Your summer moment awaits you, now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. Welcome back were just about an hour away from the big reveal of this years top state for business. Scott cohn who has been busy giving us clues all day joins us with the very last clue. Im sorry, where are you again . Im in the top state for business we drove here. Weve reached the end of the road on this whole big extravaganza that we do every year, and lets remind you where weve been here. All day long weve been counting down americas top states for business the number five state is North Carolina which is the magnet as all for technology and innovation and has some issues with both education and quality of life. Number four, texas always still a great powerful economic state and great infrastructure, but their economy has taken a dive with the price of oil the number one economy last year down top 25. Minnesota, expensive state, but they say high value. Minnesota has great quality of life and superb education, and georgia, which has a terrific workforce and the strongest economy in the country all around, so which state is the number one well, thats where i am so well keep you busy for a while longer a reminder of the hints that weve been passing on. Wideopen spaces, you cant get there from here. Classic sounds, buying opportunity and get the point. Those hinds all have one thing in common. They are about this state, the top state for business which well reveal with the help of some very special people, people you may know, coming up about an hour from now. Guys i i seriously i think i have it but i dont want to say it out loud because i dont want to i think i know, too. No special insights, you know they keep us all in the dark on purpose, but scott, can i are there going to be any surprises next hour is donny osmond coming back because ive got to get red . Well, i dont want to narrow it down because, you know, there was a reason that we h donny osmond last year. Because he was the favorite son of the top state so i dont want to narrow it down wouldnt that be something if he came back again. You know. Just a couple minutes heads up. Youve been doing this 11 state. Has a state ever repeated . A state has never been backtoback theres been state that have won multiple years, most notably texas and virginia the first six years and no state has ever won backtoback. Utah has number one last year and doesnt even make the top five is that possible did donny and marie move away . Still one to reveal. Im awear. You dont look like youre in utah, unless youre down south in one of the national canyons. Okay. You know your way around. I i think ive got it. I think you do, too. I didnt get it someone else got it, and i think they are right. Well see scott, youll be back next hour. Go ahead. A lot of inspired guesses out there. I look forward to its going to happen in about an hour from now. Thank you, scott. Well see you soon. One other clue. The audio delay just tells us how far away. It was definitely there, so that means he was at least a good distance away. Hes a good distance away thats another clue right there. Were heading to the close, i think. 17 minutes left in the trading session. The dow is up 19 points. Pepsi beating earnings today while arch rival coke is seeing its shares up about 9 so far this year. Up next, a bull and a bear serve up the soft drink sector for us. And viecoms show thyme setting the price of the floyd may weather and Conor Mcgregor flight omersat would be under 100 but when you order the fight it might be best to read the fine print well explain coming up. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Hey dad, come meet the new guy. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. What d baby crying fly me to the moon elegant music and let me play bell rings have you ever walked into the swimsuit section and smelled coconut in the swimsuit dpt . Find out which state will be americas top state for business one state will top them all. All the data and exclusive analysis at topstates. Cnbc. Com look at snap today. Down almost 9 now at 15. 5 downgraded from equal weight to overweight and cut the price target to 16 from 28. Its below the price target now. Morgan stanley is citing increased competition from instagram and slow development of snaps ad product for the change lets face it. We know what this is about it fell below its initial Public Offering price yesterday which was at 17 and now they are downgrading the stock. A lot of pressure. Like a trap door. Look at that. From the close yesterday until today. Yeah. They got to show better user trends and Show Advertising innovation and that fake didnt just take their best product. Exactly. Pepsico is trading lowering despite an earnings beat and raise its llyear forecast earlier today. The companys chief executive officer Hugh Johnston appeared on squawk with his thoughts on what led to this quarters earnings beat. Running about 8. 5 of our revenues are coming from products over the last introduced within the last three years and those products are typically not big on the volume side they typically are more premium oriented, and as a result were getting higher dollars per ounce or per pound and thats why you see a bit of the muthed volume growth relative to the Revenue Growth. Is it time to get in or out of those soda stocks joining us for a bullbear debate is a Senior Research analyst at cowan and company and nick mody from rbc Capital Markets. Vivian, what do you say youre the bull i am the bull we have an outperform rating on pepsi. The preferred name in the group relative to coke and dr. Pepper diversified model. We like their our thesisn the soda category more broadly, which is not that popular with the manufacturers over the last three years is soda is the new cigarette. We think its categorically fundamentally structured and youre the bull i am. Pepsi is less than 12 of pepsicos sales and for cocacola, volumewise, carbonated drinks are 76 of their business. Nick, youre cautious in this catery, arent you. For largecap staples in general weve been cautious. The names weve been recommending have the lowest dividend yields and are more cyclical in nature these stocks are trading at 20 times earnings, trading at nice premiums to the market in general. Staples have underperformed the market by 350 base points year to date and you really have to at this point in the cycle find names with infliction points and thats why i prefer poke over pepsi and dr. Pepper. Go a little bit more on that given that vivian just said she doesnt want any exposure to cokes beverage name psych why is that a good one james quincy has been at the company for ten years versus the 20 t30 years have you for all the prior ceos and he owes coming in with a president bush vision, more focused on costcutting, an area where coke has a lot of opportunity they are starting to realize that opportunity we also think theres a lot of opportunity to reinvest in different categories of the subsector. Coke is heavily indexed to csts or carbonated cost drinks. They have the largest footprint in the world thats exclusive to them and they need to be more represented in dairy, juice drinks, teas, coffee, et cetera, and i think this broader category initiative for coke is going to drive better volume growth than what i think people are anticipating right now and lets not forget, the nonalcoholic beverage category is growing 4 to 5 so as long as coke can maintain market share and we think they can gain share were talking about a company that can grow in the mid single digits. So i agree with nick that james quincy does bring a fresh of fresh air and a new view to cocacola, like he was the first at the company to acknowledge they had a sugar problem that being said, its a very heavy lift and while i think nick is right. They all acknowledge theres a lot of opportunity for cost cutting. I dont think you can cost cut your way to better top line grow. Iave a very forou pert new england to the amazon discussion weve been having which is if brands are no longer relevant do pepsi and coke have the last remaining brands . As they diversity away out towards other types of snacks and drinks, are these susceptible to market share losses to private label . I think in some categories yes. Bottled water being an example of a highly commoditized category thats heavy and shippable, right, and its convenient for the consumer, but at the premium side of the category theres evidence that brands do resonate specifically the launch of life water by pepsi has gained a lot of traction in the first five months of the market on the flip side, of course, cokes brands have suffered as a result but they are really battling it out in Super Premium water. Nick, what about this initiative at pepsi to have healthier foods, healthier snacks is that the right direction or too late is it too small a division to move the needle on a big company like pepsi or what do you think here pepsi has been on this Initiative Since indra took over it makes a lot of sense in terms of where the consumer is going consumers do want indulgent products, and if you really think about it coke in the u. S. , its volume growth has actually been positive and has been beaten by sell side expectations for the past six or seven quarters, and the big driver there has been fanta and sprite, do you korbnated drinks with lots of sugar. Think about starbucks, you walk outside a starbucks and look at what people are buying they are not buying black coffee they are buying frappuccinos. With eight pounds of sugar. Exactly. As long as you present it differently its not the same thing. We consumers are so fickle, arent we . Thank you both for joining us. Thanks for having me. You bet. I love everybody on twitter trying to guess the top state for business everybody has got their hints. Got to wait a little longer their guesses. By the way, none of you have guessed the one we think it is. Oh, really. No one has come up that one yet so is i find that very interesting. Surprising. Seven minutes left with the dow up nine points. Up next, counting down the closing minutes of the trading day and more on the newly maleased Donald Trump Jr. Eils and what impact they may have on the president s business agenda stay with us for your heart. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. upbeat dance music dance music abruptly stopping dance music starting then stopping upbeat dance music bell ringing just inside the 3 00 mark. You can tell im a little more casual than normal and a lot of guys on the floor are having a good time. Theres a reason and youll know later in the week why im dressed the way i am today lets go and look at this chart of the dow today whatever this was about. Can you see right when the email stream came out on twitter from Donald Trump Jr the a lg os went crazy and the humans scratched their heads and nobody could figure out what the big deal was in the scheme of things, and then the market came back and were going out with a tenpoint gain commensurate with that, you didnt actually see a rush to safe havens though gold did come back a little bit here late in the afternoon. Were up 2. 40 here and lets not get too crazy and as we established with Rick Santelli, the dollar index continues lower. Were at lows for 2017 at these levels, so youre not seeing a huge move at least into the dollar, even as the fed discusses the possibility of raising rates next month, and speaking of which. Seema mody is here with me as we get red for Janet Yellens testimony to Congress Starting tomorrow. Absolutely. Janet yellens testimony when yellen speaks, wall street listens. Look at the yield off the low the session. They need the job sector to be strong and stubbornly low inflation. Were looking the at the trajectory of the fed going forward. A lot of yields went lower after the results came out at 1 00 eastern time and that helped that market. With the u. S. Tenyear note at 2. 6 , when you have yields and emerging markets at 5 , 6 cans, it will continue to rally and thats been a big theme in 2017 and at 13. 5 billion inflows and emerging market debt, will rates here continue to stay relatively low a discussion tomorrow perhaps as we hear from janet yellen. 1z and Consumer Staples continues to suffer. One of the big loser was michael kors, the amazon threat and the continued destruction its having on retail and grocer as well. At some point you have to imagine were overdoing the amazon thing, stating the obvious. Have to see what happens going forward. Thanks, seema. How come i didnt get a microphone like she did. Going out with a sixpoint gain on the dow after a wild and woolly session stay tuned for the second hour of closing bell and the top of state in business coming up. Kell deand i think we know what it is, dont we, kell . It was michaels guess that tipped me off. I dont know if youre right were going to find out this hour welcome to closing bell. Im kelly evans. Heres where were finishing up the session on wall street today. Looks like all the averages managed to close in the green. The dow up about four points, significant giving the 100point spike lower we saw this morning on the Donald Trump Jr. Emails. More on that in a moment about a fourpoint gain for the dow despite heavy sell pressure. The nasdaq composite more comfortably in the green along with the russell 2000 and gains of about a quarter of a percent and a third of a percent respectively and the broad s p 500 cant do it today and locks like its shedding about a point and a half 2425 is your broad level well keep an eye on this as the trading shakes out here. In case you havent heard, its also amazon prime day with prices for amazons echo and goggle home also slashed today a look at how the ai devices stack up against each other and what happens to you and your state once youre in either ecosystem. Well also get the big reveal this hour. Which state in america is the best for business . Scott cohn will tell us the winner, and well speak with the governor that have mystery state coming up. Joining me is michael santoli, jeanie wyatt at post nine and denis berman checks in the wall street journal. Michael, quite a dramatic trading day actually whats most significant to you about it what happens to you and your data, im guessing, with those devices. Maybe if youre sitting at home. If youre connected or not by those devices, something happens there, too, but i wouldnt know about that whats most significant today, kind of like the unflappable market that flapped very briefly in response to headlines today i dont think you can really put a whole lot of weight on these intraday moves that dont take the market out of the existing range and weve stayed in this range even when we were selling off on the Donald Trump Jr. Headlines earlier. The lows in the s p 500 were above the lows and i feel like it was one of the gambits that traders said maybe this matters or maybe not i dont think it changes the overall picture. A market kind of waiting for a little more guidance on either fed policy or economic acceleration or not to figure out exactly how it should be positioned going through the rest of the year. Janet yellen will be on the hill tomorrow and waiting on earnings season, the banks friday and big tech names next weeks. Some of the c. H. I. P. Names, Applied Materials up, western digital, some of the memory plays doing well the flip side, michael kors down 7 saw that big downgrade and ultra beauty shading 5 . Wheres the right place to be in this market . I think the right place to be in this market is in this market i agree with art cashin said earlier. Its summer and light volume, and a trend is not going to be made today on a lot of news. Its actually technically repetitive, so i think you want to be in the market. One of the things that i think is really attractive now, because we dont want to be out of the Money Center Banks. Were facing an area of lower regulation, and we just came off great news from, you know, the Bank Stress Testing and citigroup is probably the cheapest Money Center Bank out there so we really like that a lot as a value stuck. Dennis, speaking about that the cfb arbitration thing and seeing if the Trump Administration challenges that can we do deregulation outside of health care and tax reform that may or may not happen fascinating stuff the role is one of the most important roles in banking if he chooses to roll that back, there is some latitude and the big question is whether Congress Wants to get involved. Yes, theres room in there in a nonlegislative way and until Congress Perhaps takes up the choice act which in the end i dont think it will. Were in a relatively narrow range as it comes to Bank Deregulation Bank Earnings coming on friday will be a big indicator for us as michael said. Is the economy growing in perhaps the way we were expecting it through the first half of 2017 by the way, this morning, we got the job report openings. Took a little biof a step yes. We had a big jump in openings and that last month jopd back a little bit crude oil was moving higher, 45 a barrel, by the way, thats certainly going to help. Theres a lower output in terms of u. S. Crude from the eia breaking news to get to on twitter and lets send it over to joorsin julia, whats happening there . Hey, kelly, thats right. Twitter appointing a new cfo apointing ned segal taking over from anthony noda and the new cfo will report directly to jack dorsey they are saying that segal bring more than 20 years of finance and Capital Markets experience, most recently serving for the Small Business group at intuit where he led financial and Strategic Planning for the companiess 2. 5 billion division including quick books and payroll before that. He was ceo of a company that did patent Risk Management and before that have he was at Goldman Sachs so certainly a big move from from twitter to try to show that they are hiring more people at that senior level, especially as it faces ongoing criticism about jack dorsey running two Public Companies at the same time, both twitter as well as square. Kelly, im here in sun valley where dorsey is not expected he probably has his hands full, but were expecting to see anthony nodo who will be here and holding on to both of those positions until late august when segal takes over the cfo role. Back over to you. Theres only that report that anthony nodo was going to pandora. Thats all that weve heard on that front. Reporter i have heard Nothing Official about nodo going anywhere this latest release from twitter said hell continue in the c. O. O. Role as opposed to having both roles his name has certainly been thrown out, there, but for now it sounds like hes staying at twitter . Anything that you would add. Not really. I dont think people looking at twitter saying what really needs to be fixed or improved, its about financial controls maybe if theres a new way this new c. F. O. Would have a better story and relationship with wall street, that could be a better factor but just filling the volwhat people should want having checked off. Square at an alltime high today. You read anything into that . Square is doing pretty well look what is happening to visa asamesex struggling and square how is making it work, but, again, i think thats a fundamental question about twitter. I think mike would agree with me how does a guy do two very demanding jobs in two hype Competitive Industries twitter stock has done reasonably well. But on a historical basis its pretty poor. If i were him, i would warren to see which would have the better prospects all right. Lets get to washington. Markets moving lower earlier in the day after Donald Trump Jr. Are leased email correspondence showing he agreed to meet with the russian lawyer and was aware of the russian governments support of his fathers president ial campaign. Kayla tausche joins us with the very latest. Its the highest profile instance yet of a Trump Campaign official meeting with a russian over the course of the 2016 president ial race. President trump somewhat out of character today silent on the issue on twitter, but he did offer this basketweave statement through white house spokesman Sarah Huckabee sanders saying, quote, my son is a high quality person and i applaud his transparency referring to his son Donald Trump Jr. s decision to lead to the chain of emails that led to that meeting sanders apart from that directed all other inquiries on the matter to outside counsel but did answer a question about how the president reacted personally recently in the last week when he found out allegedly about this meeting that his son took with the purpose of sourcing opposition resource on his opponent Hillary Clinton, allegedly sourced from the russian government heres what she said. The president is i would say frustrated with the process of the fact that this continues to be an issue, and he would love for us to be focused on the economy, on tax reform, on infrastructure, and thats the place that his mind is and thats what he would like to be discussing. Reporter of course, enacting that agenda will require the cooperation from laurms, many of whom were taken aback by this disclosure today it does appear the Market Impact of todays events in washington was short lived. Kelly, well see if the new cycle and Attention Span over on capitol hill is short lived as well back to you. Yeah, kayla, thank you. Kayla tausche. For more on what it could mean on markets lets bring in terry haines here. It seemed like there was initially concern about the emails and then it was overshadowed by mcconnells announcement they are delaying the recess in a couple of weeks. What are the odds of Getting Health Care done before that thanks, kelly thanks for having me on. Yeah, youre absolutely right. I think the market reacted appropriately today in both instances. We are still at 55 to 60 that the Affordable Care act gets done and signed into law in august and we noted to clients that we thought what mcconnell actually did was a very good possibility so i think that makes it a little more our forecast a little bit more likely anyway and it also shows that Congress Continues to be focused on trying to deliver the agenda regardless of whatever is going on in the white house. Terry, i wonder, theres been reports that perhaps the removal of those obamacarerelated taxes on upper income earners and investors might actually not be part of the package it is a goes forward, so, in other words, the taxes stay in place. I wonder if thats as likely in your view and continue that changes what this all might mean from an investment perspective. Well, mike, thanks for asking that i think whats likely to happen is that the vast majority of the taxes go they might they might go in different time frames but lets remember fundamentally the twostep here. The twostep is do aca and get rid of most of the taxes in fiscal 2017 and then theres the ability to do more aggressive tax reform 2018. For those reasons i doubt congress is going to give up on those taxes. Terry, on that front you said about 55 chance that you think the Health Care Bill gets done before the recess. Where does that leave tax reform or the tax cuts broadly speaking especially if they are going to face big losses in the midterm elections . Well, tax reform i think continues to get done. If aca gets done in the time frame that i suggest, august sometime, and then what happens is Congress Ends up talking about and doing the fiscal 18 spending and the budget and debt limit in september and october and turning again to tax reform at the end of the Fourth Quarter of 17 into calendar 2018 they will be able to do some things underneath that before they get the floor action, but our point has been that the window here is for tax reform is Fourth Quarter 17 through the first and Second Quarter of 2018 i think the sweet spots is probably the First Quarter of 18. Final question. The donald jump jr. Email situation, what does that do to affect everything that we just discussed with you, if anything . I think for that, the question is what does it do to affect that . I think theres less there than meets the eye. One thing ive said frequently on this air is that the most important thing for Congressional Republicans is to get both of these things done. They want a record of achievement, of accomplishment going into the 2018 mid terms and thats what they are trying do regardless of whats going hon in the white house. Terry, appreciate you joining us. Thank you. Jeanie, i wanted to pivot back to something thats catching my eye the last couple of sessions. Its alta beauty they have gone from 315 about a month ago to 255 today. This is one. Best performers in the market. We just talked about how Department Stores are cutting prices at their cosmetics departments maybe because of the inroads its made. Any idea whats going on there in terms of the beauty product, their customer, anything like that in general . Well, i think basically it all comes back to the retail space which has been really, really challenged, a lot of noise, a lot of concern. I think its just the space, and and i think a lot of investors are pulling back their exposure to the retail space and thus even the best performers . And some great opportunities are being created in that space. Does that mean alta as these levels has more of an opportunity . Absolutely. Were still consumers an millenials are probably some of the best consumers michael, anything to add . Weve seen this pattern of the recent winners getting sold and the money getting recycled and alta has had such a great run. I dont think it helps that people are focused on areas that either amazon has not yet attacked in a very kind of wholehearted fashion and where there might be vulnerabilities also the streak of the magical Comp Store Sales and the magnitude alta has had, probably not going forever. None of you likes the Consumer Staples the valuations are higher than some of the biggest caps. Thats been the gold trade for a lot of investors, and they are expensive. Staples rex pensive. Dennis, anything you would add there . Well, you know, your other guest mentioned perhaps some bargains is Dicks Sporting Goods really worth 7 less monday than on friday some of the selloffs in the stocks seem pretty aggressive. Hit the auto parts sector last week and there were real actual reasons for that it does seem like its time to assess is there some opportunity in specialty retailers thats literally being thrown out as the amazon shadow looms if private equity is walking away from abercrombie which is word twothirds of 1 billion because it has high debt levels and doesnt see the opportunity. Who is going to bail out a lot of these struggling retailers . Well, absolutely a number of these will go into workout mike knows this better than anyone teen retailers have been in chaos for a while. 1,500 stores worth 500 million, 600,000, 400,000 a store, close to nothing no doubt that some of these companies are going to go out of business seems like there is opportunity in that secular view to maybe pick up a company that has little more durability in its opportunity. So in this kind of environment though, a store is a liability, to pay rent for years to come and not necessarily earn at the store sales. At least if you own the real estate, you dont have to be in the business, you can put a gym in there and if all you have is the Retail Business and not the real estate. You have a coming accounting change that will force retailers to actually recognize the longterm costs of the lease on their books. Its making it hard for people normally in there for the bid and theres value in here to actually act. Maybe theres going to be opportunity if you really know what youre doing and youre carefully picking this stuff. Got to be. There are 19 million millenials right now starting families, and a family formation and new housing is always a huge, huge motivator for consumer spending. I think i know 18 million of them, by the way. Is that when they stop wearing makeup youre not on social media, kelly. How do you do it i know them all. Thank you both for joining us appreciate it very much. Theres still plenty of time left to take advantage of amazons prime day deals including halfpriced echos, but google is countering with a discount of its own on its home device which ai device is the better choice that debate is next. And not just investors waiting for answers on the bill to replace obamacare and on tax reform small biz own remembers getting critical all the details coming up. Reach out to the show on twitter, facebook or send us an email closingbell nbcuni. Com. Youre first cnbc, first in business worldwide welcome back theres still more than ten hours here on the east coast to get deals on amazon prime day. Courtney reagan joins us with a look at what customers have been buying so far. Amazon giving cnbc an update on how prime day is progressing with a little more than ten hours to go. The company says the most shopped for themes fall into home chefs, for the home and techies. Beyond amazons own devices it says topselling items from Small Businesses and entrepreneurs include the 23 and me dna test and bluetooth he had phones a slice of intelligence giving cnbc a summery on the weekends early prime day deals. For prime now an alexapowered shopping the data comes from a scan of millions of email receipts so amazon prime sales for the past weekend were up 14 compared to the previous weekend amazon. Com sales broadly were up 6 over the prior weekend and 15 of the amazon prime now buyers over this past weekend were first time prime now shoppers thats our earliest look at how the sales are going. Kelly. Courtney, thank you its a marathon, not a sprint. Amazon and google are slashing prices the google home is now 99 from 129 and were only partway through. Amazon is saying it sold three times as many echo family devices worldwide today than it did for the entire event last year, so what do users get out of it and get into when they commit to the ecosystems . Joining us is the editorinchief at the verge and max wolf who is at 55 institutional. What do you think is going on here they are giving these echo dots away the echo dot at 35 is an incredible impulse buy you dont have one of the speakers kind of the next interface for computing in the home. Theres tremendous value to having a thing that sits there all the time that you dont have to think about. Do you have one of these . I have all of them, of course saying alexa, play the vergecast is saying okay, google, thats actually like a factor, so much easier to talk to the amazon devices. Michael, do you have these yet . We dont. Are you actively saying no . Its not that we just havent really seen the opening and just havent had that impulse for impulse buy its not about suspicion of use of the data or anything like that is correct at least on my part. Late adapter, i think thats basically all it is. Do you think we should be more, i dont know if suspicious is the right word, but just cautious about what were opening ourselves up to by introducing these devices into the home. Look. Theres always a value to being cautious and people are kind of sick of swiping and tapping and press and obvious conversation is the place to go, natural language parsing and processing has gotten much better for the first time in a while amazon is really going to challenge the apple google duopoly for what the operating system is and this is a battle to encircle homeowner and the person in their car in whats the conversational space where they will deal with the communication of the future. This is no minor matter. Google is a Great Company when it comes to execution. Who do you think has an edge in amazon versus google in these devices . Right now its Amazon Google has great purchases the nest purchase was interesting,ing a little bit of a stutter step in rolling that out and it looks to me like amazon has the shopping environment you want they are doing more and more streaming movies and television. They will start to do more of the news business. It looks like its amazons right now and thats a challenge to ios android world and theres a new player in town with a lot of left behind it. If they have a new speaker thats going to be like 300. 349. And the sound is fine, how do that fundamentally compare with the 35 echo dot the biggest transition is people pick convenience over sound quality. If youre looking at the about 50 home pod and theres a 230 echo show with a screen, i think that is going to be really hard for consumers and they might pick amazon. Do you agree with jeff fowler that the screen is annoying and not that fun. My screen showed me anned a. It says one of the biggest problem to all these devices you dont know want to say to them. Maybe sometimes you dont want to talk to them. They are trying to give you more intuitive ways to interact with it, but ultimately the most in they want you to buy into the ecosystem home that you can say hey, google, turn on my tv, ale can the thing i wonder about, not about companies being sinister and really trying to do anything thats all that dark and underhanded but just in the way you interact why is it attractive for amazon to have it there well, because youre going to be buying more, probably will have a little more interaction with amazon in general. Are you going to have that checkout that says heres what i know i bought . You know what i mean to me a lot that have stuff is what makes it great for amazon maybe theres going to be slippage in whether customers like it or not. Thats a fair point guys, thank you, as we debate the future of the ai ecosystems. Meantime, fight fans know how much they will be paying for mayweather mcgregor. Ufc president dana white did he keep his promise that he made last month here on closing bell under 100 bucks . Well find that out next. And americas top state for business one of the things we rate is quality of life and in americas toste p atfor Business Life doesnt get much better. Well finally reveal where we are coming cup on closing bell. Welcome back and its time now for fast take. We begin with kroger saying its production level is too close to the private select label is the this petty or important maybe a little bit of both. The hostilities are so intense because the stakes are so low. Whats interesting i think the stakes are quite high though. They are high in a general sense, but these products are never going to be seen side by side by dev knit in addition only in each change, but i do think crowinger is very defensive of its franchise, the fact that its established some brand equity and most are aware of that. If its generics why does it matter over time the store brand gathers like kirkland that everyone is obsessed with. Tesla is adding Service Centers staffed by 1,400 technicians as it gears to roll out the mass 3 model sedan can they afford all of this . I guess they have to. You always have to marvel at teslas ambitious but how they also have to do everything from scratch. Basically they have to ramp up from zero to mainline car company if they are going to meet the production goal they have to do it i dont think its a matter of, you know, essentially a maybe, and i dont think its also going to help the stock in itself because its just a necessity if youll have all the vehicles on the road. Fair point. The stock was up 3. 5 . Next, a new line of server chips from intel which is currently the server chip market its basically the whole thing and amd started serving its own chip service last month and ibm says they have server chips coming so theres a lot at stake for intel. Intel is trying to prove its not just about legacy pc and old server type business if you cant i cant establish the kind of technical merits of the new chips, of course, but if you look at the stock, its been entirely left behind by the xhuktor rally and valued at eleven times forward earnings basically the market is saying we dont see any growth or pivot towards the new tech that were doing. Maybe thats an opportunity because its still a wellrun company. If the new chips are everything they say they are, then they are already all right. And remember when dana white told us about the cost of the mayweather and mcgregor fight. Are you going to keep this under 100 bucks on payperview . Yes. 75, 50, how low can you go . I dont know. We dont know the number exactly right now. Okay. He said he was going to keep it under 100. Its 89. 95, but if you wt hd its ten bucks more, its taxed so its over 100. I dont know if its taxed. Do it in sd, i dont know it will change the experience but its aggressive and it shows that they think they have something here that will combine your kind of boxing fan with the mma fan, and, look, this has been the Business Model for a long time. Gouge the people really interested. And this is also important under the new ownership. Wme img is building a whole interesting contempt and maybe a distribution type model here i think youre right. But it is aggressive given the fact that the consensus is this wont be much of a fight but the curiosity often gets you. The last one wasnt much of a fight. Time now for a cnbc news update with sue herera. Thanks investment heres whats happening at this hour. Senators from both hours say Donald Trump Jr. Should testify before congressional committees investigating russian interference in the 2016 election, this after he said he met with a russian lawyer in june of 2016 anticipating information damaging to the Hillary Clinton campaign well, okay, any time youre in a campaign and you get an offer from a Foreign Government to help your campaign the answer is no, so i dont know what mr. Trump jr. s version of the facts are. Definitely he has toss testify. Senate republican leader Mitch Mcconnell announcing a delay in the senates planned august recess until the third week of the month to provide more time to work on legislation and approve nominees he also said the senate would vote on a bill to roll back obamacare next week. And the voice of kermit the frog is changing for the first time in 27 years Steve Whitmire who has voiced the iconic muppet character since 1990, the year that jim henson passed away, has been replaced by fellow muppet performer matt vogel it will be interesting to see what determiny sounds like this time around. Thats the news update this hour back to you, kell. Im so tempted to try to do it so i cant so ill respect the man that could. My miss pig iy is not bad but kermit no. Can we see it i still have to work a number of years i have three kids that ive got to the put through college so ive got to the stay working. I dont know, they might need a voice for her. Sue, thanks very much. You got it. See you tomorrow. Our sue herera. President trump has been touted as the business president , but the nifbs latest rv s sll biz optimist dropping why that group is getting more critical next. Y we want to end alzheimers disease. But what if, one day, there was a white flower for alzheimers first survivor . What if there were millions of them . Join us for the Alzheimers Association walk to end alzheimers. Register today at alz. Org walk. upbeat dance music dance music abruptly stopping dance music starting then stopping upbeat dance music bell ringing welcome back Small Business optimism made a major jump in january when donald trump took over the white house. The nfib is now telling a different story. Reporter main streets mood has taken a turn for the worse as uncertainty in washington continues. Small Business Optimism took a hit this month dropping. 9 points to 103. 6 forever june this is its largest monthovermonth decline since november and its lowest level since the same month the index saw a huge postelection pop back to 108 back in december the biggest drops were ones that expect the economy to prove and those that expected higher real sales this months drop echos the fall we saw back in march when we saw the house plan to pass its plan to repeal and replace obamacare. The conservative lobbying group the nfib used pointed language to discuss the grid in washington saying this drop is, quote, due to the mess in washington and adding that while progress is being made its being poorly communicated and that main streets two biggest issues of health care and tax reform are, quote, stuck in the bowels of waington politics. This is certainly the most critical language ive seen used since President Trump took office the groups chief economist said it could be problematic for main street if it does continue the top three issues, taxes, government regulations and finding skilled labor. That labor issue continues to be a real struggle for companies that are looking to higher and expand right now kelly, back over to you. At least thats kind of a bullish sign kate, thank you very much. Our kate rogers. Fed chair janet yellen heads to capitol hill for the second of her appearances, but first state is just moments aways top right, scott thats right, kelly there comes a time every year, the 11 years weve been doing this, where you just cant keep the secret anymore theres only so many hints you can give weve got a lot of smart people out in the twitterspear and cnbc so the time has come in a moment well tell y touhe top state for bills. I promise ill spill the beans after the break. Hey. Hi. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were 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 its the moment weve been waiting for. Hints are over the guesses have got to come to an end its time to reveal cnbcs best state for business 2017. Lets go to scott cohn who is in the winning state. I want to see the question marks go away on the top left of that screen, scott. Please, tell us who it is. All right they will go away momentarily. You know, as we keep saying, weve been doing this for 11 years and doing it a certain way. We thought wed do it a little bit differently this career and rather than me tell you the top state for business we thought wed hear from some of of this states most famous faces. And the winner is Washington State. Men and women of Washington State, you are now number one for business. Weve got bill gates, jeff bezos. Weve got me, what else could you need professional sports, a great theater, great coffee, rain, rain, a little rain. Also the best state to catch salmon, get a cup of coffee, to cheer on the seattle rain and be a husky. Heres a little business idea flannel beer cones, coffee flafrksd run with t. Hey, thats geny g staying congratulations to Washington State from where im from for being named americas top business for business. Heres my song forever in love and its exactly how i feel about the state of washington. We are live at mt. Rainier National Park in a part of the park aptly named paradise, not just because its 5,400 feet above sea level. Washington state is americas top state for business 2017. Lets take a look behind washingtons climb to the top. We searched north, south, east and west and this year one state soars to the top, washington, the evergreen state, with 1,621 out of 2,500 points. Always a contender, washington finished in sixth place last year the home of amazon, boeing, costco and microsoft, washingtons economy is the Fastest Growing in the nation, the third best overall according to our study jobs are flooding into the state. The Housing Market is among the healthiest around. Washington also shines in technology and innovation, second only to california in patents last year. Robust growing economies, smart workers, innovative entrepreneurs, safe communities, and a beautiful natural bounty all is not perfect here washington is an expensive state ranking 37th for cost of living and 32nd for cost of doing business and washingtons infrastructure ranks 32nd and road quality is poor unemployment in washington is 4. 5 the state has no individual income tax and no corporate tax, just a socalled business and occupations tax that can run as high as nearly 5 . The top state and local sales tax is 10. 3 washingtons largest private employer is boeing the largest industry is durable goods manufacturing. Soaring to the highest heights leaving the rest green with envy washington, americas top state for business 2017. And congratulations to washington and great thanks to the National Parks Service Advice where were we yesterday . At the Bainbridge Island and got to sip a little bit of the local grape at the local vineyards. The reverves is beautiful, 150 acres, created by a timber executive prentiss blodell and a gorgeous place the hints, wide open spaces, boeings factory in everett, washington, the largest building in the world in terms of usable volume, 13. 3 million cubic miles. Cant get there from here. That was Point Roberts in the northwest part of the state. Whats known as an exclave. Is,314 people. You cant get there hon land without going through canada classic sounds, puget sound and the seattle sound. A lot of that. Buying opportunity buying opportunity, amazon and microsoft. Didnt know it would be amazon prime day and get the point, the space needle and jay inslee is the 23rd governor of the safety washington in his second term. Governor, we dont often get the winning governor to come here for the big event. You not only did that, you biked here from olimpia which is 70 miles away listen, i would never miss a chance to come to paradies and paradise washington is one of the most beautiful places. One of the most luxuriant alpine medals in the world. This is the best thick in our state thats happened in our state since we won the super bowl when i look at the Business Activity going on in our state, it rivals the prodigious heights of this mountain behind us so thanks for this honor. It really is man honor. Congratulations for it. I mean, theres a lot going on here and a lot of crosscurrents i mean, this happened quickly in terms of our in terms of it our ranking. A lot of people say its amazon. What is going on here and why is this state beyond what you said a great state for business i dont think its an accident i think it comes from several pillars for Business Growth that were committed to in washington number one is quality of life. Look, theres no better place toss live with clean air, clean water, places to hike and kayak and places to climb if you want. When were recruiting a business and talk to ceos, they want to come here for quality of life and once we have skilled people they dont want to leave quality of life is really important. Second, really a focus on innovation if you think about our strength, were not thinking about last centurys companies. Were thinking about next centurys as well, so we have a Research Agenda thats given us the Worlds Largest flow battery where you can integrate Renewable Energy and a new company that does radar for autonomo autonomous vehicles. You just came through a bruising legislative session this legislature about as divided as any in the country. Right. You had to raise some taxes in order to meet a Supreme Court mandate in your state to improve the schools. Yeah. So cost of living is high, you heard that how do you sustain this in a state where costs are going up and up and up, seattle talking about a city income tax now. How is this going to keep go, or is this this the peak . Well, as you know, we also believe talent is the number one or third pillar of our economic growth, and we know if we grow intellectual talent, fundamentally intellectual talent is the Energy Source that will drive the economies of the future so were dedicated at giving our kids the highest quality education of all time. We want them to be able to compete. We welcome people from around the world to build these hightech companies but frankly we would rather have our kids take the hightech jobs so weve made Major Investments this year its the largest new improvement in education, including in s. T. E. M. Education, science, engineering and math its the right thing to do at the same time, there were some property tax increases, but also decreases to ameliorate some of those so that the state took more of the burden because we want every kid to have quality, we dont think your kags you run the risk of growing pain s this happened fast for cost ov living. Not dpood. What the most rapidly growing economies of the country all have in common is this challenge. Particularly of housing costs, so if you lock at San Francisco, boston, to some degree, because we have such robust economies, we have 65,000 people who want to grow businesses that obviously creates more demand for housing rents have gone up so we have to find ways to ameliorate that weve got to find ways frankly to have more firnt and dense housing. And Smart Transportation infrastructure which can lead to more affordable housing. We pass ed the larngest infrastructure pack angel in the history of the state greenest one as well we get science this this state infrastructure as we said, another area we got work to do, but its coming d. C. , theyre struggling to come up with an infrastructure package. If you want to know how to do it on a bipartisan basis, come to washington we were able to pass the largest package in our States History its dedicated to a whole host of assistance. We are e liclectrifying our transportation system. We are building light rail like crazy. So, help is on the way all right, the governor of washington, thank you gep. Congratulations on top state for business you can now find out where your state ranks all of it, our whole study, online now at topstates. Cnbc. Com see where your state stacks up we want to hear from you what you think, the hash tag is also top states. Back to you. We think the governor as well have you mentioned what the bottom states are this year . Were going to go through that tomorrow. And its all available online. But well be reporting on that tomorrow and why on the closing bell. Bottom state for businesses here is West Virginia and theres some spresing reasons. We have a story about that great stuff again, 70 mile bike ride is impressive i got to do a pull up or something. Scott, thank you so much and the governor as well and michael, we couldnt stump the san tolly educated gut feel and by the way for next year, look at last years list, see what states ranked highly. That might fit into the back crop drop zpl i have a problem with this they are benefitting from these tremendous companies, but we talked about the minimum wage issue. 15 and c tech, whatever it is for the rest of seattle and can they absorb that its an interest iing question d im not sure if its tapering over as some other states and i hope they look at whats happening with all the other bottom states. Especially some of these states anned think about how to avoid that outcome sx its a holistic view. And deaf netly, these marquis companies. Amazon could be anywhere, proof they need b to be. Zpl but theres a tremendous amount of spin off growth that happens from Big Companies and hubs of corporations and microsofts been there forever so b i think theres something to it. Especially when youre bringing in worker, education and other lifestyles i was just there over the in seattle. I had no idea. Drive 70 miles uphill to the next block he was saying that every single time somebody gets in the car and says theyve just moved there, amazon . Absolutely he said its a tough company to work for could it be the last huh ra . Gossip has donald trump replacing janet yellen last year if so, tomorrow could be her last appearance before congress. On fast money, a blackrock strategist has a message to nervous investors. Che keep calm and buy on welcome back lets talk about oil we have a market alert whats happening, jackie well, the api was out with numbers a little while ago and these have an impact on crude prices we got a drawdown in crude oil from the a p pi of 8. 1 million barrels. Steeper than we were looking for. Gasoline, a drawdown of 801,000. This was a bullish report here you can see we closed at ha. 0 45. 04 watch at 10 tomorrow to see if numbers mirror what the api reported 3 pop what do you think . Crude has been dancing around on these numbers and if its bullish in the morning, the prices reaction to bullish data a is going to tell you a lot about whether it got launched out a little be it because its been whipped around. Even with the pullback, we had a nineday, its been all over the map very streaky and a lot of talk that its now the latest fast moving instrument by the way, do you think im on to something . Not talking about renaissance. Everyone whos launching now thinking theyre going to be able to come up with an its not about beating the market i dont think we have a better chance of doing that i think thats how the game is played all right Federal Reserve janet yellen will head to capitol hill to deliver her report to congress heres the question. Are we listening for, were always listening for stuff about rate rises, the actual Balance Sheet, but also is she defending her job . Theres a will the of different angles here. I think shes going to want to certainly accentuate that the condition of the labor market, shows its in healthy condition. Yes, theyre looking to get this inflation target up and basically, not so much a mission accomplished, but things have moved in our direction, allowing us to move ahead with this program. I think in terms of things to listen for is how she thinks about the combination. Today, we heard from lisle brainered, who suggested, shes very suggested that you know, draining away the Balance Sheet is going to take the rate of rate increases perhaps down the road i think the market is trying to sort that out. And this becomes a question b about setting policy the guy whos now going to be part of the fed, i think they were saying he was a rules guy in the past. But still feels like most of the Community Around them would want nothing to do with that. No, they dont want rigid rule, but ipg its going to trend in the direction of do they Say Something about this target refine what were looking to hit on labor and on inflation or is it going to be more of this impressi impression two day event kicks off tomorrow amazon prime day will be over. Thats it. Fast money begins now. Yes, it does fast money does start now live from the Nasdaq Market site overlooking new yorks times square im scott wapner in for melissa lee. Our traders are tonight, t a snape disaster shares of the social Media Company sinking after one of its lead underwriters turns on the stock. How low can it go . Plus, prime day in full swing. Well have a special report and later, Terry Simpson is here with a contrarian market call that is sure to have all of wall street talking