Transcripts For CNBC Power Lunch 20160727

And your money sound advice. Aa hard to believe, tyler, all over the next two hours. All of them are going to be here and more. Welcome everybody. Im tyler mathisen. Earnings a big driver for the markets this hour. We are in the heart of earnings season. And heres your stat of the day of the more than 200 s p 500 Companies Posted results so far this season, 72 of them have beaten on the bottom line. And this hour we will shine the spotlight on the mother ship, comcast, the owner of cnbc. Well also talk about coke and t tmobile. Thank you, tyler. Im Michelle Carusocabrera coming to you live from the Wells Fargo Center in philadelphia. Len Lenny Kravitz has just gotten off the stage. Donald trump drawn away from the dnc, said in a News Conference today that he said he hopes russia finds Hillary Clintons missing emails. Were going to get the Clinton Campaign reaction minutes from now. And set the stage for a big night here in the city of brotherly love. If not for donald trump, wed probably be talking about this here and what happened last night. The Clinton Campaign got good headlines, head the ticket, Hillary Clintons historic moment. Usa today, first woman. But now were talking about donald trump again. And her emails. Secretary clintons running mate, tim kaine, is on the docket tonight, plus president obama as well. So a lot of headliners, also Vice President biden and former new york city mayor Michael Bloomberg will all address the crowd here at the Wells Fargo Center. A lot coming up in the show, guys, but back to you, brian and tyler. Michelle, thank you. Were going to talk more about trumps comments about the 30,000 missing emails, some powerful words. Well get to those in a bit. As you might have discerned a jam packed two hours of tv coming your way. We begin with a developing story about a possible beer deal between sab miller and inbev, because there may not be a deal, dom chu. It may be on pause right now. The latest headlines in the big megamerger in beer, the biggest in history, hit that pause button. Sapmiller is halting work on the logistics of being bought by anheuserbusch inbev, this comes of course on the heels of inbev raising its bid to buy sabmiller by one british pound to 45 pounds, thats about 59 a share. That increased bid was being put forth in response to concerns that the decline in the value of the british currency after brexit was unfairly hurting sabmiller shareholders. Now, the new shares also shares of mulson coors as well. In order to obtain u. S. Antitrust approval for this big deal to happen, the combined company would hypothetically have to shed its interest in a u. S. Joint venture called miller coors, which is responsible for brewing and distributing all of the miller and coors products in the United States as well as other smaller labels. Sabmiller right now owns 58 of that. It would likely sell its interest to its partner molson coors, bringing full control to that denverbased colorado brewer here. The halt in the Merger Integration work has increased risks around all of these moving parts though the halt is being viewed by some, guys, as a negotiating tactic to angle for a potentially higher bid from a. B. Inbev. Weve reached out for comment neither has gotten back to us. Well bring more when they do. But the shares of both of those guys moving on this news. One thing thats interesting here and the reason the currency has become so much in the focus here is this was an all cash deal. There was no stop. Well, there was a contingency. You could choose one of two options. You could take an allcash deal or a hybrid. Oh. I didnt know that. I thought it was all cash. So theres multiple components to this particular deal, but the real interesting part about this is whether or not they actually do because we thought we had a done deal in this whole situation. Sure did. And all of this of course has to do with the distribution rights, all of these beer labels that are owned and distributed around the world by different players and different partners just because you see a label on there doesnt mean its necessarily made by that company. Remember, bill gross has recommended, even though hes thought of as a bond guy, buying some equities in advance of this deal. So were going to get him on later today. Well talk about the fed, but were also going to ask him if hes changing his position recommending any of these equities. Sabmiller has depository receipts that trade thinly here in the u. S. They didnt move as much on the deal with this particular bit of news. Well see if that does happen when things kick off for trading tomorrow in london, guys. We were going to ask you about earnings. Not sure we have time for that. Meantime we are going to Steve Liesman as we have about 55 minutes until we hear from the fed. Will we get a surprise rate hike . Take it away. Tyler, sorry to burst the bubble, but little chance of a rate hike today, but some nervousness and chatter. The u. S. Central bank could raise the possibility of a september surprise creating Downside Risk to bonds and stocks here. Now, thats not the conventional wisdom. Let me remind you what that is. The cnbc fed survey sees the next hike coming on average in december. And just one rate hike this year. And average funds rate for 2016 of just 0. 6 . So not a lot of hiking expected. Contrarians though are warning that the market may have underpriced the chance of a september hike and that the fed could introduce that risk to give itself the option to raise rates. The reason is want to avoid a sharp lurch in prices if there were indeed a hike in september. So give time to adjust. The recent sharp decline in bond yields and rise in stock prices does raise the stakes though on getting the fed wrong here. Let me give you some keys to the fed. One is how much it upgrades the Economic Outlook today. Since the last statement in june, Growth Prospects have brightened as has the jobs picture, but the inflation outlook remains murky. Not really pushing the fed towards higher rates necessarily. Second, will the fed continue to quote unquote, closely monitor concern over the postbrexit fallout on global economies, or signal less worry . I want to tell you how wonky people get here. Theyre wondering whether they drop the word closely from closely monitoring. And that signals thus concern. That, folks, is advanced fed speak and analysis. Another question, does Kansas City Fed president ester joiyce resume her ways . And is she joined by others want to hike rates. Finally, what role does the election play here . The fed will never say this, but if business contacts are telling them the president ial election creates economic uncertainty, the fed could choose given another reason to hold off until ses before acting. My take is i think the fed stays the course here. Its going to strive for neutrality. It doesnt want to introduce any new risks right now. Why . The data from brexit is not in yet and the fed lost some credibility in the spring when it hinted of a possible hike this summer that of course never came to pass. Finally, most of the fed speak, which theres plenty of by the way, it hasnt leaned against market pricing. So the risk is there, but i think, guys, its minimal for hinting at a september surprise. All right. Steve liesman, steve, stick around. Scott minerd is going to join ugh, with guggenheim partners, got about 240 billion under management. Scott, we talked about this just on air, but i want to show viewers, since the last fed rate hike which was in december of last year, look at the returns we have seen across a variety of Asset Classes. The dow up 6 . Oil up 15 . Gold up 25 . And the 10year yield has gone down by 30 . In other words, bond prices have gone up. That benefits mortgage holders. If you bought Asset Classes at the fed hike in december, you probably made money. Why do so many people seem to fear the fed . Brian, its the conventional wisdom, right . If the fed starts to raise rates, thats going to be bad for stocks, that means bond prices are going to go down. People think that gold will go down in price. And playing with conventional wisdom has proven to be an unprofitable bet. Because i just cant buy and youll forgive me, sounds like you agree, i cant buy the premise if fed raises rates by a quarter point everybody will selleckties, sell bonds. Because that implies the money is going under the mattress. Right. And, look, the thing everybody has missed here as the fed and other Central Banks around the world have had to print money that asset prices are going up. And people have been too preoccupied with the u. S. Federal reserve. Really what we need to be looking at is whats going on in europe and whats going on in japan. You can question whether those movements tied to the way things i dont think theyre directly tied, but theyve done well. No, but my question is in the case of equities is the move fueled by the fed. Oh, absolutely. Its liquidity driven. Its all liquidity driven. Recently ive come out and said stocks will go up another 10 to 15 this year. Its not liquidity at the fed, its liquidity at the ecb and around the world, right. And there are a couple of big the japanese bank, the ecb, the british bank, theyre all meeting in the next few days, weeks. Right. And, you know, if theres any sign of any kind of slowdown in europe or in japan, which it seems slowdown is already there, these Central Banks are going to have to act aggressively to pump more. They are. Japan is undergoing a stimulus plan, yet another one. Thats a physical stimulus plan. Theyre literally throwing money at the problem. The ecb in the same way. Does that mean you at guggenheim are buying japanese equities, european equities . Are you going to ride their fed tails like many people did here . Well, in most of our clients are focused domestically. So what were trying to do is ride the tail of these European Central bank, the bank of japan and look for places where asset prices are going to go up. But if youre going to go overseas, brian, you got to play for beta. And betas in the emerging markets. What does that mean . Well, look, if youre going to get a surge in asset prices because of liquidity, then you want to focus at the place where youre going to get the highest return for every dollar bet. Give us an example. Well, right now i think chile looks really well. Brazil has done well. Im a little hesitant to jump on brazil again. Were already invested in brazil. But, you know, for people who havent committed money yet, chile looks interesting, and russia looks very interesting, despite what donald trump says or other people say. Russia. Russian equities. Thats right. Bonds . U. S. Bonds at these yields, what do you do . A lot of people got them. I think you got to get longer. I think buying Long Duration municipals, Long Duration treasuries are a good bet. But, tyler, the other place, if im right and were going to see risk assets go up in price, high yield bonds and bank loans should do well too. High yield bonds, bank loans, chile. S p higher. And russia. 10 to 15 . From here. Some real world advice. Right now lets get back to michelle live at the dnc in fill dell if with what is coming up on tap next. Michelle. Well, as youve heard, brian, donald trump once again seizing the spotlight today challenging Russian Hackers to find Hillary Clintons missing emails. Well ask Hillary Clintons press secretary what he thinks about that next here on power lunch. Dont move. Oh watson, your japanese is very good. Thank you. speaking japanese exactly. I can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to Cyber Security. speaking japanese will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. A lot of fun. Find out how American Express cards and services its exciting. Its exciting. male 1 you get to explore, you get to see things that people dont get to see or do. announcer at truecar, we believe buying a car should be as fun as driving one, so well help you find the car you want and show you what others paid for it. male 2 once truecar came into the picture, thatsthats where i go now. It was just such a quick, easy experience that i just go back to them. announcer discover for yourself how easy carbuying can be with truecar. Welcome back to power lunch coming to you live from philadelphia. Donald trump once again trying to take the spotlight to challenge Russian Hackers to find Hillary Clintons missing emails. John harwood is on the floor with that story. John. Michelle, last night we heard from president clinton about his wife. Tonight well hear from president obama. But that appearance by the current commander in chief has new drama because of this grow ing controversy over drumgzs financial and policy relationship with Vladimir Putin. Today in a press conference he said he hopes russia could get his hands on missing state department emails. Russia, if youre listening, i hope youre able to find the 30,000 emails that are missing. I think you will probably be rewarded mightily by our press. Lets see if that happens. Now, i spoke to clinton policy chief Jake Sullivan after that statement. He said this has to be the first time a major Party President ial candidate has actively encouraged a foreign power to conduct espionage on a political opponent. This has gone from being a curiosity or matter of politics to a National Security issue. And in fact this statement seemed to be too much even for Speaker Paul Ryan whose aide put out a statement saying Vladimir Putin is a devious thug, russias a global menace and they should stay out of this election. Dont know if speakers on the stage behind me tonight, tim kaine, her running mate, Vice President biden, or president obama are going to mention this, but we do know that this controversy is not going away, michelle. No, its not, john, thank you so much. John harwood. Here to react more, Hillary Clintons press secretary brian fallon, brian, good to have you here. Thanks for having me. Anything more you want to add to Jake Sullivans statement and what he said to john harwood . Well, theres been a pattern lately over the last several weeks of donald trump making mysterious, strange comments suggesting his allegiance to Vladimir Putin, his admiration for Vladimir Putin. Just last week we saw a change made to the republican platform at their convention in cleveland where they softened language taking out a provision that was sort of taking a hard stance against russia with respect to ukraine. And then later in the week you heard donald trump give an interview to New York Times where he said we might abandon our Eastern European allies and not uphold our commitments to nato, which is something that would send shudders down the spines of our eastern allies living in the shadow of putins influence in that region. This is though perhaps the worst of all the comments that hes made to date openly suggesting that a foreign country should come in and conduct Cyber Espionage against any u. S. Interest is whatever happened to politics stopping at the waters edge . I think we agree with the sentiments from speaker ryan suggesting that all americans should be upset about the idea russia is trying to illegally commit espionage against any u. S. Interests. This is not a political issue, its now a National Security issue and donald trump is on the completely wrong side. Is it frustrating however that he has managed to take over the news cycle all over again . Were not talking about what happened last night. Were not previewing whats coming up tonight. Were now talking about him and emails again. Actually, i think it fits right into the topic of conversation at tonights convention because the theme of tonights Convention Appearance from our speakers was always going to be about Foreign Policy, what it takes to be a steady commander in chief and why donald trump is an unacceptable candidate for Higher Office when it comes to having his finger on the button and access to the nuclear codes. This is somebody who suggested hed be happy to see more countries obtain access to nuclear weapons. Hes somebody urged praise and admiring comments about International Strong men like kim jongun and Vladimir Putin. And alienated our allies across europe including in the uk. I think this is just another display as to why donald trump is dangerous and unfit temperamentally to be president of the United States. Do you think its going to hurt him . When he threw john mccain under the bus, a lot of republicans thought his campaign is over. Hes managed to say extraordinary things that normally you wouldnt think a candidate would say and still survive. Do you think this really hurts him . I think this is going to provoke further cleavages within his own party. Youve already seen speaker ryan speak out and suggest this is unacceptable and we need to stand up to russias influence secretary ryan said that about the mexican judge. Well, look yeah, but the numbers tell the story in terms of donald trump is having significant problems uniting his own party. That stands in stark contrast to the displays of unify y. Nnity yn the floor here last night. Bernie sanders last night gave a full throated endorsement of Hillary Clinton. The role call last night was so encouraging in terms of our party being united going into the fall. There was nothing that happened last week in terms of reaching out further. So will these types of comments as unacceptable as they are perhaps rile his existing supporters . Perhaps. But i think the persuadable voters out there that people that are putting the judgment and value, the judgment of potential commander in chief are going to be extremely troubled of hearing this from donald trump. In his News Conference as well and cnbc is an economic audience, right, a business audience, he talked about a federal minimum wage of 10. What strikes me about what hes campaigned the most on, trade, now hes talking about the minimum wage and banks. There isnt that much of a difference it seems anymore between the two candidates. Theyre both antitrade. Theyre both talking about raising the minimum wage. And theyre both antibanks. Voters know better than to trust donald trump on any of these issues. I mean, this is a guy who spent months during the primary thinking that their wages were too high. He was against any type of federal floor for a wage level. And now for him to throw out at the Eleventh Hour that he might be open to a higher minimum wage, i dont think the publics going to buy it. Thats not the way he conducted his own business dealings. His business track record shows this is somebody who left creditors holding the bag who walked away from obligations that he had to contractors that helped him in constructing some of his signature casinos in new jersey. So this is somebody that has consistently put his own bottom line ahead of those Small Businesses and everybody else that he comes across. And to the extent anybody has an open mind to hearing him on some of these issues in terms of being antitrade or suddenly in favor of minimum wage, were going to tell the story nor the next three and a half months hes a complete fraud on those issues. My colleague has a question, tyler. I want to make an observation and ask one question if i might. The observation is mr. Trump is prone to say things improvisationally, off the cuff. He is the quintessential ad lib campaign. And then he tends to walk things back. Ill bet you that over the next 36 hours he begins to explain what he meant when he said what he said earlier today. But the criticism from the right would be, brian, i think, that for whatever mr. Trump said it was secretary clinton who was using a potentially compromising server out of her home. Excuse me. And when she was traveling using devices that would have easily been breached by foreign powers, whether its china, russia or whomever. And that that is the real National Security risk that we ought to be concerned about. So i would just like to get your reaction to that observation, which sounds like a pretty obvious one that would come from the gop. Well, i dont think donald trump is going to be able to walk this back. I dont think throughout this campaign hes said a single negative thing about Vladimir Putin. He clearly has admiration for him. Hes praised him on numerous occasions. And hes now taking policy positions that only serve putins interests rather than those of our own interests here at home or our european allies. And, look, this issue doesnt even have anything to do with secretary clintons emails from her time at the state department. The hack that was committed by the russians was against the Democratic National committee. These are emails that were exchanged by officials at the Democratic National committee in washington. So this doesnt even have anything to do with that shes apologized for that, expressed regret for that, the doj closed that case. I think thats immaterial to this whole connection. Is there any connection you know of between the trump campaign, the Republican National committee, the broad opposition to the democrats, any connection that you know of between them and the kremlin on this or anything else . Any direct connection that you know of between mr. Trump, the gop and wikileaks on it . I personally could not say. But the fbi has announced that they have an Investigation Underway into this hack against the Democratic National committee. So well have to follow that investigation wherever it leads. I would just point out that donald trump continues to praise putin, make apologies for putin, even as all the evidence suggests that they have been involved in this hack, this illegal hack. And hes continued to take policy positions that are in russias interests in and are completely out of line with his own partys positions with respect to our obligations to nato and our commitment to our european allies. And his Campaign Manager to boot is somebody that has over his career worked for prorussian interests in other countries propping up putin allies in Eastern Europe. So theres a lot of circumstantial evidence that causes you to ask questions. But well have to wait to see the results of the fbi investigation. Brian, its brian sullivan, are we getting a preview of your strategy on the democratic side, to tie to trump to putin, is that strategy number one . Trump is tying himself he said today he only met the guy once. But he cant seem to get through a press conference without expressing his admiration for him. Its quite strange. Listen, to be fair, brian, i listened today about half it was a long conference. About half the questions from the media, some of my colleagues, seemed to be about russia and putin, so he couldnt avoid the topic. And what he said was he thought putin had better Leadership Qualities than some of our leaders here. Thats about the most that i could gather from what he said. But is this going to be the strategy . You think thats tying trump to putin is going to work to hurt him . He also said, brian, that if he was president he would seek to court and gain the respect of putin. And last time i checked that was not our national interests. We should be putting u. S. Interests above seeking or courting the supporter endorsement of strong men like Vladimir Putin. Look, our strategy is going to be quite simple. Were going to continue to make the case that donald trump is temperamentally unfit to be commander in chief and when it comes to being a steward of the economy, its Hillary Clinton that helps. To follow up in the spirit of the question, in tylers question about the spirit of the server. Do you have any concerns when you see the situation with the dnc, are you concerned one that russians may have gotten ahold of her email . Two, are you concerned that at minimum the population could wonder if thats a possibility especially in the wake of what theyve heard about the dnc getting hacked . I dont think so. Theres no evidence that there was any successful breach of her server by the russians or anybody else. Director comey when he came out with the findings of the fbis investigation confirmed there was no evidence to that effect. And really as a practical matter i think that the doj closing out that case means that its effectively a closed matter. And in the minds of the public i think they would much rather hear both sides talk about the issues that are a concern to their lives. Thats what were going to be focused on here at the convention for the rest of this week. I think thats why well have a much more successful four days here than donald trump did last week in cleveland. Mr. Fallon, thanks so much for joining us. Incredibly busy time. Thanks for having me. Your money, your vote, tune in tonight to cnbcs special coverage of the Dnc Convention tonight 10 00 p. M. Eastern time. Guys, back to you. Interesting conversation, were grateful to him for coming on and spend so much time with us. Countdown to the fed rolls on, wall street may not expect a rate hike, but anything can happen. And we will bring it to you live when it does. Power lunch is back in two minutes. 32 minutes to the fed decision. [suspensful music] shares of tmobile getting a bit of a boost today. Joining me braxton carter, chief Financial Officer for tmobile. Good to have you with us. Take us through the quarter. Eps was good, most significantly maybe the ads of subscribers very nice. Well, thank you very much. Its definitely a pleasure to be here. And let me tell you tmobile has once again captured all the growth in postpaid phone, the most valuable segment in the market in the Second Quarter. Over 100 . Its the 13th quarter in a row where we put over 1 million subscribers on the books. And its the 13th quarter in a row where we positively ported against all competitors. And to top that off we just recorded the best churn in the companys history. So were very, very pleased. And the financial metrics are just incredible. Who is your target customer . And if i would intuit from your ads, you go after a younger millenial demographic. Yeah. Tmobile is the young carrier. Were what every other National Carrier isnt. And we certainly have broad based appeal against all segments. But millennials and the future of millennials and the data consumption as internet goes mobile and all content goes to the internet is extremely important. And i think our brand is positioned very well against all segments, but millennials are definitely very, very important to us. I think one concern in the Analyst Community might be this. You are a heavily promotional company. You have done giveaways of free rides on car services, pizzas. You have a tuesday sort of promotion where you have various things give away shares of stock or data, et cetera, et cetera. Obviously you do this because net you make money at it, but it must as it does when Auto Companies put rebates on the hood of cars, it costs you money. Talk me through that. Yeah, absolutely. We Just Launched uncarrier 11, which was thanking our customers for everything that they have done for our company. And that has been absolutely incredible. Very innovative. The First Company to ever offer stock to existing customers as well as an additional share of stock for every customer whos referred to us. The number one app on the internet for a significant period of time, the downloads have been amazing, our customers are extremely happy with what weve done here. And its all translating into incredible financial performance. Uhhuh. We just reported a 12. 8 year over year increase in revenue. More importantly we just reported over 35 increase in our ebitda and very solidly profitable with a beat against consensus on eps. 19 buys, 8 holds, 1 sell. Very quickly, braxton, pokemon go, what does it mean for data usage . I tell you, its amazing. Thats one of the things we again really innovated on. Pokemon go is one of the biggest sensations that our countrys ever seen. And its just a preview of whats going to happen with mobile. And what we did is we opened up all pokemon go consumption absolutely free, doesnt account does not count against your data caps. And its just been an incredible sensation. Go pokemon. Go pokemon. Not pokemon go, braxton, thank you very much. We appreciate it. Hes the tmobile cfo. Thank you. You got it. A tale of two tech giants, apple soaring, twitter tanking. What does twitter have to do to right its ship . Thats ahead. Plus, just under 30 minutes away from the fed about 25 minutes, excuse me, fed unlikely to raise rates but what will they say about september . Could they shock the world . Ali did it, maybe yellen will do it. Yeah. Were back after this. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Hello everybody. Im sue herera. Heres your cnbc news update this hour. Fbi director james comey speaking to the International Conference on Cyber Security today. He says the rising Cyber Attacks from around the world are attacks on our freedoms. This is more than attacks on our infrastructure. It is more than attacks on your money. Its about a tax on employees. Its about attacks on reputation. Its about attacks on our economy and our security and even attacks on our fundamental freedoms. The French Interior Ministry Says that france will boost the operational reserves of the countrys National Police force. Speaking in paris, he said 2,500 french people have asked to join the reserves in just the last ten days. Nearly 24,000 reservists will be patrolling various events. Democratic Vice President ial nominee tim kaine meeting with delegates from various states this morning. Ahead of his speech tonight. He talked about his great track record in Political Races and how he thinks Donald Trumps Foreign Policy would damage the United States. And doctors are reporting some disappointing news at an alzheimers conference today. A once promising drug failed in a latestage clinical trial. The drug called lmtx did not work any better than a placebo in a study of about 900 patients. Disappointing news indeed. That is the cnbc news update this hour. Back to you, brian. All right, sue, thank you very much. 20 minutes until we get the latest fed statement. Stock market not doing much. The dow is down about 13 points despite apples run. The 10year yield down a tick to 1. 54 . In fact, were up were down on the yield 30 since the fed rate hike back in september. Lets get a check on the bond market right now with rick santelli. 30 isnt what it used to be if youre looking at that in treasury rates, ill tell you, brian. Look at intraday of tens. We flipped down to 1. 53. If we would close here that would be the lowest yield close in two weeks. Look at the day before the last fed meeting in june. This is pretty cool. If you look at tens, were hovering pretty much right where it all started on the 14th and established that 1. 57 low yield close on the 15th, twoyear yields a bit higher, not much, theres your flattening of the curve. Heres where it gets interesting. Look at the dollar index since the last fed meeting. Maybe investors are paying attention to data, but warning were still down on the year even though were higher. And the s p 500, this is what its all about, look at how thats moved higher since the last fed meeting cht dont go anywhere. We have a lot coming up. Power will be back in two minutes. With usaa is awesome. Homeowners insurance Life Insurance automobile insurance i spent 20 years active duty they still refer to me as Gunnery Sergeant when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and im a usaa member for life. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. I think maybe theyll be some buffeting of the consumer as we go forward, but in the end i think weve got a really great run going on in our north american business. The Beverage Industry is growing dollars. The president of cocacola talking up the health of the consumer today right here on cnbc. We also heard similar comments from the ceo of panera. The reality is we have a better customer, a more fluent customer for them a slowdown doesnt mean they brown bag it. It probably means theyre not buying that lexus. But just yesterday if you saw the show and we hope you did we told you about a slew of restaurant downgrades from wall street, maybe fears of a restaurant recession. Who has it right . Lets bring in diane swonk, founder and ceo of ds economics. Seems we take one step forward, two steps back every time we get good news about the consumer, we get some fear that comes out. Whats your take on the health of the u. S. Consumer . Well, theres certainly a lot healthier than they were. Thats not hard to say. They are spending a lot more robustly in the Second Quarter. Weve seen a sharp uptick in consumer spending. Of course where they spend has changed a lot even over the course of the quarter. Were seeing them nest a little more, spend more on food at home than going out to eat than they did earlier in the year. I think were still seeing leisure and hospitality very robust out there. But, you know, whether or not they go out as much when food at the Grocery Store has actually been falling in price from a year ago, its giving them a better deal. And these are consumers that we know if anything else theyre more savvy than they ever have been in shopping. And that means shopping for food and whether or not they go out to eat and what the deals are. I think many restaurants on the other side of it there are a lot of winners and losers in the restaurant arena, but i think the issue as well is theyre seeing the upward pressure on their own margins or squeeze on their own margins from rising minimum wages at the state and local level. Which is a different equation than youre seeing in the Grocery Store. Were going to get to diana olick in just one second, but diane swonk, back to you, because i think youre making an important point about where they spend. This is theory that doesnt come from me, comes from friends that work in retail, run retail, my wife worked in Consumer Products for 21 years. When people buy homes and cars, which theyve been doing a lot of, how do we expect them to then also buy a bunch of other stuff . So i do wonder if we get Retail Metrics that are weak from macys or whoever it might be, is it that the consumer is dead . Or the consumers just saving for something a lot bigger. Or theyre spending somewhere else. And youre exactly right. We know theyre spending online instead of walking through. Every flight im on is packed. I know you travel a lot. Literally, every flight is sold out. Yes. And i think this is really important to look at is consumers are spending on leisure, hospitality, on experiences, but theyre also nesting. And im sure dianes going to chime in on that in terms of the fact were buying more homes. When we buy more homes its the largest single trigger to additional spending on housing related products. Remodeling is up, hard to find anyone out there skilled to do any remodeling on your home at this point in time. Many in the business have left the business because its been on bust for so long and we dont have many of the skilled immigrants we once tapped into to do a lot of that work. So we are seeing a lot of that movement out there. But nesting versus going out, where do we go to hotels, where do we spend our money, this is all the choices we make. And theres a lot of tradeoffs. People are spending on experiences, i believe. Yes. But ill throw one other idea in the same vein in here. If youre spending to pay for a child to go to college, or to go to a private school, youre spending a lot less going to a restaurant, going out and buying that next pair of chinos. Chinos . Or fewer cars. Yes. It displaces one form of spending displaces another. And youre spending a lot on school books. It amazes me how much they still cost. Ive got two now going. Believe me, im well aware of this. Yeah, right. Diane swonk, good look there at the u. S consumer. Thank you. All right. Another segment of the economy may be slowing down. One we just referenced, which is housing. Lets go from diane to diana olick, why are we saying it slowly, i just talked up housing and now youre going to throw water on me. Not a lot of water. Brian, pending home sales missed expectations barely in the positive in june up just 0. 2 . And up only 1 from a year ago. And this after falling for the past several months. Now, this is surprising because this measures people out shopping in june, signing contracts, and thats when Mortgage Rates were matching their record lows thanks to brexit. Makes you wonder why theyre not buying as much. Realtors are blaming it squarely on a lack of supply of homes for sale pushing prices up higher and making it less affordable. Now, new home sales are doing better. As you say people are buying more new homes, but these are more expensive and builders are benefitting from the lack of supply so they can push prices higher. Still, theyre also not building as nearly as many new homes as we need to meet that historical demand, forget pentup demand. The realtors chief economist said last month he thought june was the peak this year for closings, that is closed home sales. I think given these pending numbers hes probably right. Back to you guys. Di, thank you very much. Big speakers and giant joints, the dnc has been anything but boring and anything can happen tonight when the president takes the stage. Among the speakers. We will head back out to philly live next. Whats happening here . This is my new alert system for whenever anything happens in the market. But thinkorswim already lets you create custom alerts for all the things that are important to you. I guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. Announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. Youre here to great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Im Michelle Carusocabrera live at the Wells Fargo Center in philadelphia for day three of the Democratic National convention. Still ahead, tech journalist and talk about his latest in the battle with twitter that he has ongoi ongoing. And senator christopher kuns of delaware joins me live as well. First of course minutes away from the fed decision on Interest Rates and power lunch will have that covered backtoback. We are back in two minutes. All right. Welcome back. Or welcome to power lunch. If you are just joining us, we are five minutes away from the feds latest decision, or nondecision, on rates. Will they surprise . Will they announce a hike . Dont worry, mom, i got the phone. Wall street isnt counting on it, but anything can happen, tyler. And we know were probably not going to get a hike, but it is about what they say that could move markets. That is really what everybody will be watching if it turns out the way we think its going to turn out. What you should watch are those numbers. Right now ahead of the fed take a look. Theres the dow basically flat off about 12 points. The s p 500 down about half as much, six points at 2163. The 10year note, note the yield there 1. 53 and gold up about 0. 5 at 1326 and change. Got an all star panel with, bob doll, david kelly j. P. Morgan funds, anika from wells fargo, danielle di martina former dallas fed advisor. Bob doll, take me through your thinking here. What could they say that would disturb the markets or unsettle you . Look, i think theyre going to be right down the middle of the road as they always are. Theyll talk about the improved data, but at the same time theyll say there are risks here and there. They will not set a date and they wont do anything on rates today and i think the equity market will be fine. This what i would add is equity markets have had quite a run since brexit, i think to pick a number half of the rally has been associated with the fact that rates globally have moved down. Which means p es have moved up. So if that comes into the mix maybe that becomes something the equity market eventually gives back. But in the meantime were getting respectable earnings, and thats what the markets really focus on. Danielle, did the fed miss a moment to raise rates earlier this year . Whether june is the one im pointing to or one of the earlier meetings, did they miss a moment or did the moment just not appear . You know, i think that missed a moment a few years ago. There was a great oped in the wall street journal earlier this week that said what does the fed do . Theyre backed in the corner. Theyve missed an entire rate hiking cycle. Many opportunities. Many, many opportunities. Janet yellen conceived this labor Market Conditions index. Its 19 different indicators that gauge the health of the job market. Its been negative for six months running now. Its the longest stretch since 2009. Again now youre really backed into a corner. She sees it. And she doesnt know what to do. They dont know what to do. David. Yeah, i completely agree with that. The problem is they should have started moving a long time ago. But at this stage i think theyre just going to say as little as possible and tiptoe quietly off to the beach here because they could try and manage expectations, but nobodys going to believe them. I do think theres a possibility theyll raise rates in september. If we get two good jobs reports, janet yellen has an opportunity in jackson hole to talk about maybe the fed actually moving in september. I think it would be very unwise for them to wait all the way to december. But theyve never found the perfect moment. But you never get perfection in life. I think theyve made a big mistake by not moving sooner. Anika, say they do copy and paste the last statement into this statement, lets hope they dont, but say that do, all things remaining equal, do you think that to davids point almost guarantee a september hike . You know, its always a live meeting. And a september hike is still on the table, but our forecast is for a december rate hike. Of course this is a fed thats going to be very cautious. The good news is that Overall Economic growth will likely post a solid reading in the Second Quarter on the back of solid consumer spending. But my two cents on whether the fed is behind the curve, im going to take an alternative view. I think that the fed is still focused on inflation. And the core pce deflator is still below that 2 number. It all depends on what the neutral rate is doing. And if we are right, the neutral rate is somewhere around zero. Danielle, jump in. I think the fed is using the wrong inflation metric. Ive always been of that opinion. I think it has given them license for way too long to rely on the pce, in fact, theyve switched gears between the core and the headline pce in recent months because its convenient. Yeah. And price of oil has come back down again. Weve got 30 seconds, full setup before we get to Steve Liesman. Lets do it. Dow moving a whopping two points, tyler. Apple is a big mover, but Everything Else holding it back. The 10year note yielding 1. 53 . Its actually down 2 today. Thats a rather large move for the 10year bond yield. Two ticks. Yeah, two basis points. Fancy business language. But 1. 53 . Crude oil another big mover down 2 again. Below what some consider a key level 42. Steve liesman and the fed decision. No change in Interest Rates, no change in Interest Rates. The Federal Reserve leaves its benchmark fed funds rate in a range of 0. 25 to 0. 5 continue to say rates will rise only gradually and funds will remain low for some time. Theres a new line in the statement this time saying nearterm risk to the outlook have diminished. I would note that this is different from what it said in december where it called the risk balance. Its not quite as extreme but say the nearterm risk to the outlook have diminished. It continues to say its closely monitoring Global Economic and financial developments. There was one dissent, ester george, Kansas City Federal reserve bank president. They upgraded the economy saying the Economic Activity is expanding at a moderate rate. Last time they said it appeared to have picked up. But labor market has strengthened. Job gains were strong in june following weak may. And added this new line saying that the combination of payroll gains some increase in labor utilization in recent months. Some increase. Household spending it said was growing strongly. It had previously said it had strengthened. Didnt talk about housing sector, Business Investment remains soft according to the kurpt statement. And then finally on inflation really the same story as before saying it continued to be below the 2 objective reflecting whats been going on with energy. It said that market based measures remain low as opposed to decline. So, guys, really boils down to how the market wants to look at first the upgrade of the economy in the first instance and second, these two new lines that nearterm to the outlook have diminished in the first instance and second this line in some increase in labor utilization in recent months. I would say it is a small step towards laying the groundwork for an Interest Rate hike, but i wouldnt say its a full step. Tyler. I think that thats a big line. Thats a big line. I just tweeted that out. I think its a pretty big line. Maybe anika would know better. Nearterm risk to the Economic Outlook have diminished. Theres the fed saying that if things stay the same, things are going to get better meaning maybe that runway is clear. Would you agree with that thinking . You know, weve been hearing from the fed for some time that there have been these transitory factors that have had some impact on the pce deflator. And of course were seeing some of that start to shift. Of Course Energy prices is a perfect example of that. In fact, putting that risk balance statement or assessment into the statement is kin to the september statement that we saw. And we also saw the nearly balanced statement in december. So it opens the door to a september and december hike. However, it doesnt completely leave the door open. So that december hike is definitely still on the table. Rick santelli with the bond mashlgt reaction at the cme. Hi, rick. Hi, tyler. Start with the dollar. Well get to the Interest Rates. Dollar was up about 9 and dollar index up over 30, about a third of a cent. Now up a quarter of a cent. The twoyear note gets the award for the most movement. Should be counterintuitive considering its the shortest duration but makes sense its more closely tied to the fed. I saw 77, were now at 75. The further down the curve the Less Movement you get. 112 and 5, now at 113. I did see 115. We were at 224 in 30s and guess what after maybe a Basis Point Movement thats back where its at right now. You know, to me when they say, you know, things are not as bad, that probably just means were past the brexit vote. I cant read it all in. I like reading fiction too and letting your imagination run wild, but the real issue here is the economy is good until you talk about normalizing. Then its not good enough. I guarantee you tonight when cnbcs giving us that great coverage of the convention that the president will brag about the economy. He appointed janet yellen, she obviously doesnt have that same confidence. All right. Lets go to bob pisani now with the reaction from the floor of the nyse. A Little Movement down, bob. Well, at 2162 we were on the s p as we were going in. And were essentially there right now. We were a little bit up and then a little bit of down. So lets call it essentially unchanged at 2162. Remember, comments here labor market strengthened, Economic Activity expanding at a moderate rate. Take a look at bank stocks. Kbe was roughly there 32, 31. 89 or so on the kbe bank index. See that moving up a little bit. Any time of improvement in the economy and i think the comment nearterm risks to the Economic Outlook have diminished help Interest Rates, thats going to help bank stocks. As far as i can see main mover on the nearterm risk to the Economic Outlook diminishing have been the bank stocks. Guys, back to you. Go ahead. I certainly think banks would appreciate a little bit of curve, yield curve. Its as flat as a pancake right now. Thats what that chart just showed. David kelly, let me come back to you. The fed referred to the idea that nearterm risks to the economy seem to have diminished or i forgot what the exact word was. Is that code for saying the brexit vote is behind us . Or what are they talking about there . Its coded for two things. Its saying that because they were worried about brexit and brexit happened and clearly that did not effect Global Financial markets. Theres a sigh of relief there. The other thing this is setting up leaving september as an open meeting. I think theyre trying to nudge expectations of a september rate hike off the ground here because the data could get better they dont want to have shock expectations later. Because they could also, you know, they could also have downgraded Capital Spending if they wanted to and they didnt do so. Clearly trying to send a signal here that really our worst fears have not been realized and theres very little wrong with this economy here. So we may actually move in september. They want to leave that open, but theyve wimped out so many times nobodys going to believe them. It seems that way. Bob doll, how do you read it . The other thing that i would say might have been a nearterm risk that has now been e mill rated a little bit was that jobs report from may that they got in early june right before their last meeting. It was a frightening one. Then the july jobs report markedly better. So that might be one of the other changes theyre pointing to there. I agree. Remember the last meeting they had that bad jobs report, they were staring at brexit and very worried. Weve gotten there brexit, job numbers better. I agree with david they have put or kept september on the table. I hope they get moving. I think theyve been afraid of their shadow. Remember were not talking about the fed funds rate going from 1 to 1. 25 or 1. 5 to 1. 75. Were talking about one quarter to 50 basis points. Exactly. Why i mean, i guess were part of the story. But, bob, exactly. Even if they raise rates, were still near historical lows. Is another 25 basis points going to do anything to any of our viewers money . Exactly. Somebody give me a pink slip because they raised rates by a quarter point. I dont think so. Is the dow going to collapse because they raise rates by a quarter point. I dont think so. I may pay 20 more on my home equity line of credit because the prime will go up, right . Well, dont take one of those first off. Well, i have one. Am i right . Danielle, thats where all of what youre saying is valid and true, but theyre scared stiff right now. Remember the transitory thing. But weve got oil closer to 40 than 60 a barrel. And i dont think they were planning on that and frightened 25 basis points could invert the yield curve. Theyre simply scared. But the first few rate hikes will boost consumer Interest Income more than it would boost consumer expense. Bingo. It wont hurt the economy at all. The real problem here is a long term problem. Were setting the most important price in the world at completely the wrong level and that is leading to a misallocation of resources all over the world. It will eventually lead to asset bubbles. They need to get moving. I love that. Go ahead, steve. You say europe and japan are also setting them at the wrong level in the sense that, you know, the fed is moving away from them. Theyre going further negative. And thats something that the fed would argue almost certainly limits how far they can and should go as a matter of course here. I just want to point out one thing, which im not sure that they have put september firmly on the table the way maybe it was suggested. If you remember in october, the fed was very explicit about a coming rate hike in december. When the fed wants to be clear that a rate hike is coming, it can do so. I agree with bob theres some optionalty here in the sense that if the data remains strong, if everything looks clear, its possible they would surprise us. I think its more like a Halfway House move here in the sense that it went part of the way and said, you know what, september is the time we will nail the guidance for future rate hike. I think thats probably the best or average bet right now. Well, look, steve points out last thought. Steve points out their playbook. They typically threaten september and actually move in december. So they certainly thats certainly what happened last year. Right. Okay. David, bob, danielle, anika, thank you. Our allstar a fivebox. Look at that, like old times there. Still hoping for ten. Thatd be box inflation and maybe the fed will raise rates then. For more reaction on the fed news we are joined by bill gross lead fund manager janus global. You heard all that. Take us back through your investing life. Day one no, im kidding. Youve lived through a number of rate hike cycles. At some point barring some event, when rates start to move up, when we make that shift, what happens and where can you make money in a rising rate environment . Well, typically, brian, you dont make money in bonds. Although bonds can support their asset values with higher Interest Rates and have done so over the past 40 years as youve mentioned in terms of my career. You make money in inflationrelated assets. You make money, you know, perhaps in gold and in real estate and reits and inflation sensitive assets that would move up with inflation, which is the reason why the fed probably is raising Interest Rates. But the weird part about the cycle, bill, would be lets say we get a quarter point to bob dolls point its not much. Its not like inflation is rampant. This is not 1980 and volcker has to come in with the hammer because inflation is out of control. Even if the fed raises rates would that indicate inflation is a concern or they feel the economy is healthy enough to do so because they are kind of different things. Well, i think the feds divided. I think some on the fed are beginning to believe, as ive suggested for the past several years, that Interest Rates at near zero percent levels have a negative effect at some point on the real economy. They affect Business Models such as banks and Insurance Companies and Pension Funds and the like. And ultimately that is down to slower Economic Growth. So i think some in the fed would be comfortable with 25 basis points or 50 basis points, you know, despite their perhaps nearterm effect on equity prices. What is the play that out a few more months, years. What is the longterm effect of rates at this level for as low as theyve been for as long as theyve been . What do you see down the road five, ten years from now as a result . Well, you know, tyler, its a conjectural type of opinion because the fed is model driven and really hasnt seen Interest Rates at these levels nor do their models basically factor that in. But i would say this that capitalism cant really thrive. It can exist at 0 Interest Rates because it indicates a level of low risk taking that basically depletes the saver. And we can talk about banks and Insurance Companies, but we can also talk about mom and pop in des moines, iowa. It depletes savers in terms of their ability to earn a return on money. And what does that do . It basically hinders investment because we know investment and savings are tied at the hip. You know, like siamese twins. In terms of real Economic Growth. An economy needs certainly a positive Interest Rate and maybe even a close to positive real Interest Rate in order to function normally. You know, bill, youve talked about bank loans, we talk about banks, everybody says, well, the banks are going to really benefit when rates go up. It cant be that simple, right . Cant be. Well, bank spreads are determined significantly, not entirely. Your panel talked about it just a few minutes ago. By the yield curve. And to the extent that for instance at the moment i havent seen the market in the last five minutes, but, you know, the long bond is doing better than twos and fives, then the yield curve is, you know, flattening even more so. You know, i think yellens fed draws comfort from equity prices, which is their primary Financial Conditions indicator. But theyve got to be concerned about a strengthening dollar and a flattening yield curve. Both which are negatives for Economic Growth and financial profits. One example the 2. 10 yield curve as rick would probably point out has flattened from 160 to 80 basis points over the past year. And from 260 to 80 over the past year and a half. And this is not a positive type of thrust for bank profits, for insurance profits, for any Financial Condition company in terms of their profits going forward. Bill, were going to leave it there, but i bet if i went back in time ten years ago and asked you if youd ever thought wed get a fed funds rate of 0. 25 point and worry of a raise to a half a point, you would probably say i was nuts, but thats where we are right now. Bill gross. Yeah, i would. Thank you. See you, brian. Lets head back down to michelle at the Democratic National convention in philadelphia. Michelle. Hey there, brian. Theyre doing another musical rehearsal behind me. Hence if you hear music. Coming up next, mil Milo Yiannopoulos recently banned from twitter just last week, were going to get the latest live right after this. Its here, but its going by fast. The opportunity of the year is back the mercedesbenz summer event. Get to your dealer today for incredible onceaseason offers, and start firing up those grilles. Lease the c300 for 379 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Weand sustainability goals asool one of our top priorities. Mental i definitely rely on pg e to be an energy advisor. Anything from rebates, to how can we be more efficient . Pg e has a number of programs, to help schools save on energy. When i see a program that fits them, then i bring it to them. With the help of pg e weve been able to save a tremendous amount of energy and a tremendous amount of money. Were able to take those savings and invest it right back into the classroom. Together, were building a better california. Welcome back to power lunch. One of the most prominent voices on social media is or was Milo Yiannopoulos, guys always stirring up controversy wherever he goes. We spoke with him at the Republican National Convention Last week, the day after he was banned from twitter. Hes the tech editor at brightbart and joins us now here at the dnc as well. Thank you so much for having me. Youre covering the dnc, right . I am. Nice to see bernie supporters, our friends on the streets. Got it. Where do you stand right now in the battle with twitter . Are you going to take any action to get reinstated . Whats going on . Well, theres a little known law in europe, little known in america, not europe, we have stronger Consumer Protection laws i can do whats called a subject data access request. For the sum of six euros and 85 cents i can request every piece of information twitter holds on me and theyre obliged to provide everything they have within 21 days including anything that led to the decision of removing suspensions or my check, weve done that. They now have 21 days to respond. What do you think thats going to reveal . Well, i want twitter to be honest with users about the reasons for suspensions, bannings and all the other punitive actions they take on their platform. Twitter hasnt been honest so far. Id like to force their hand a little bit. I think users deserve to know. You say you havent gotten a clear picture of why you were banned . No, of course not. The reasons they gave were garbage. What you understand about twitter is has a ceo who behaves in some ways childishly using the system for his own private, thats not what users want. One of the consequences if you make the wrong joke about wrong person, like me, like azalea banks, the rapper, this is utility how dorsey has always described it how he wants twitter to be perceived is being run across partisan lines. I dont think they see it as partisan, i think they see it as restoring civility. Dorsey said that yesterday, in answer and question, he wants a civil level of discourse. Whos to say it was a civil level of discourse . Plenty of people enjoy the rough and tumble, people enjoy all sorts of different kinds of discourses. If twitter wants to regulate how we can speak or the tone in which we can have debates, the language we can use its going to find all the interesting people on its network, all the creators, all the most fascinating personalities are going to leave. Stock is down sharply today. 13 . And down almost 30 yeartoodate. Yes. Do you think why do you think that is . Well, Dick Costello had a relatively good reputation, the previous ceo ousted by the board for maintaining freedom of speech and not clamping down too much on freedom of expression. Dorsey does not have that reputation. Twitter is tanking for a number of reasons. One of them is it might not be possible to monetize it at all and investors are starting to realize that and getting shaky about the stock. It might not be possible to monetize twitters product whatsoever. It definitely isnt possible to monetize it without freedom of speech. And what theyre doing to drive all of the most interesting personalities away from the platform in my view is going to stall user growth even more drastically than the terrible product they have. You said you were here to cover the bernie supporters . Love the bernie supporters. As opposed to hillary or anything else, why do you love bernie supporters . I love the bernie supporters. Theyre our kind of people. They hate the establishment. They hate the crony capitalism, they hate the washington elites. Many of the same things that articulate trump supporters. Not everybody brags about a trump supporter, i am, i tend to get along well with a lot of bernie supporters. I know youre an arch capitalist, a lot of them are socialist. I am. Support goes down in a few brackets. There are the crazy social justice, you know, wacky feminists, black lives matter, campus loons support bernie by large, hard core socialist support bernie high and large. Theres spoth that wants to see the establishment bleeding and many trump voters are motivated by some of the same instincts. Speaking of donald trump today he literally said he hopes the russians find Hillary Clintons 30,000 emails. Madman. In Hillary Clintons Campaign People have said donald trump is asking a foreign adversary to hack. Youre laughing. I am laughing because the guys a political genius. Of course thats what theyre saying in the New York Times dutifully repeated the Hillary Clinton party line that on twitter theyre all up in arms about it, very high minded and shocked and pole clutching, whats the reality, theyre doing it anyway. What trump is doing with this statement is drawing people back to the fact that Hillary Clinton was sloppy and lazy and put it in the kindest possible terms. Youre not horrified hes telling russians to look for her emails. I dont know if he means it, i think its a brilliant piece of political theater. The guys a genius. Milo yiannopoulos, thanks for joining us here at the dnc. Hes with brightbart news. Dont forget tonight your money, your vote, tune into cnbcs special coverage of the Dnc Convention 10 00 p. M. Eastern time. Well have live coverage. Tyler, back to you. All right, michelle, thank you. Apple out of the way. Investors now moving onto facebooks latest earnings. They come after the bell today. That stock one of the juggernauts up 15 this year. How much more does it have to run from these prices . Well debate that and more on power lunch in just a minute. And welcome back to power lunch. 25 minutes after the hour. The dow going positive again, mildly so. It is up 30 points right now. If youre just joining us the Federal Reserve out with their statement leaving Interest Rates unchanged. But did make some fairly positive comments about the economy. Lets take a look at some of the other big headlines that are happening on this fed day and dnc day by the way. Mondelez shares dropping after confirming to make an offer to buy hershey. Garmin stock soaring up now almost 12 . Company reporting its earnings today. Company reporting Second Quarter earnings of 87 cents exceeded Consensus Forecast by 20 cents. Company posting revenues of 812 million, 50 million above the estimate. Gopropz up looking to avoid a miss. That stock down 35 this year, tyler. Oil under pressure again down 9 over the past week. Prices getting ready to close in three minutes. We will have the final trades, plus the ice bucket challenge raising a lot of awareness and money for the crippling disease als. Guess what, we may now have a major breakthrough, a genetic discovery. Well tell you this incredible story next. the best place to find adventure. Kubo come on, this way. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. Dont put off checking out your Medicare Options until 65. Now is a good time to get the ball rolling. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement insurance plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement insurance plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide and explore the range of aarp Medicare Supplement plans. All plans like these let you choose any doctor or hospital that accepts medicare patients. These are the only Medicare Supplement insurance plans endorsed by aarp. Call now and request your free decision guide. And start gathering the information you need to help you go long™. Hi everyone. Im sue herera. Heres your news update and whats happening at this hour. Gop president ial nominee Donald Trump Holding a News Conference in miami giving a message to russia, find Hillary Clintons missing emails. Russia, if youre listening, i hope youre able to find the 30,000 emails that are missing. I think you will probably be rewarded mightily by our press. Lets see if that happens. Meantime, a spokesman for house Speaker Paul Ryan responded by saying russia is a global menace led by a devious thug. Putin should stay out of the election. The Clinton Campaign also denounced trumps comments. John hinckley, the man who tried to assassinate president reagan in 1981 and shot three other people freed after 35 years. District judge Paul Friedman releasing hinckley to live with his mother saying he is no longer posing a threat or a danger to himself or others. Overseas pope francis arriving in poland greeted by the countrys president. He said the world is at war, but its not a war of religions. This on his first visit to central and Eastern Europe in the shadow of a slaying of an elderly priest in france. That is the news update this hour. Ill send it back over to both of you, ty. Thank you very much, sue. The oil market is now closing for the day and jackie d is at the nymex. High, jackie. Good afternoon to you, tyler. Oil prices took a slide today of about a dollar after that inventory report this morning showing a surprise build in inventories. We should see drawdowns at this time of the year. A closing today under 42 a barrel. That was a critical support level for crude. Remember of course people are concerned that this glut is swelling and now we have some evidence of it potentially driving demand has been propping us up. Thats expected to end. In addition the refiners turning out product going to have to work through that, so people are really starting to get nervous about whats going to happen to oil in the second half. On the bright side of this the National Average of a gallon of gas 2. 15, that is down from 2. 71 a year ago. Some saying we could lose another 10 in retail gas prices between labor day and the election. Back to you, michelle, in philadelphia. Hillary clintons week, but that hasnt stopped donald trump from grabbing the spotlight. You heard sue herera report earlier at a press conference earlier today in miami trump urged Russian Hackers to find her emails. He also tried to clarify his position on minimum wage. Sort of. Lets bring in senator Christopher Coons of delaware, good to have you here. Thank you, michelle. Great to be with you today. Is it frustrating donald trump steals the spotlight again on a day when this is supposed to be about the clintons . Its not just frustrating. Its scary. Its destabilizing. The sorts of outrageous things donald trump has been saying day in and day out, week in and week out, throughout the course of this campaign is a reminder to me of what ive always heard from Business Leaders is they want predictability. They want to know whats going on in the future. They want to know what the Interest Rate will be, unemployment might be, and for donald trump to intervene in the middle of this convention by not just commenting on russias hacking of the dnc emails but urging them to hack the emails of the democratic candidate suggests just how unstable hes going to be as a force in this president ial campaign. And i think how unsteady he would be as a president. At the same time does it frustrate you it keeps putting the emails and her personal server back in the spotlight over and over again . I realize this is about hacking into the dnc. Right. But inevitably it raises associations at minimum with her situation with the servers. For me the last time the dnc was broken into in order to influence an election, which was during watergate, it is a reminder weve got real adversaries in the world. Russia isnt just another country. Vladimir putin is a dictator, an autocrat who recently invaded and occupied crimea, a large chunk of an adjacent country. And i think for donald trump to continue to express admiration for him, to continue to encourage him to do things that are not just intrusive in our political system but now illegal is really disconcerting. I do think here in the Convention Hall and in the coverage of the speeches last night we heard a very positive, very unified message. Im excited for tonights convention. Were going to hear from my good friend and predecessor now Vice President joe biden, from president obama and from senator tim kaine, who ive gotten to know well in the senate. Im optimistic were going to have a positive message coming out of this convention. I just hope we get to focus on that. If it hadnt been for what donald trump said today about the russians and emails, we would probably be talking more about bill clintons speech. What struck some is that just like ivanka trumps speech, a speech to defend her father, my father is not a racist, my father is not a misogynist, right . Bill clinton his underlying message of his speech is, no, really, hillary is a good person. There was a defensive undertone to it where hes trying to convince people they should like her. Do you think they made any progress on that front . I think he made a remarkable impact in helping us understand not just the story of their relationship, but also the story of her leadership. How she has fought tirelessly through here entire adult life to make a difference for children and families. When i first met secretary clinton, senator clinton, it was back in 1988. She came to visit with an organization i was working with a nonprofit that was helping make it possible for kids for families with no resources, no experiences going to college to be able to afford college. Weve had a remarkable conversation. Ive known her nearly 30 years and known her as someone passionate about making opportunity real here in america. My first trip with her as secretary of state when i was a senator, a new senator, was to liberia. Last night about how hope for president clinton has a lifetime commitment to making things better and stronger for american families. Tonights a big lineup as well. Senator, thanks so much for joining us. Thank you. Much appreciated. Senator Christopher Coons of delaware. Dont forget your money, your vote special coverage of the dnc tonight 10 00 p. M. Eastern time. Tyler. Thank you very much, michelle. Disappointing ipo debut for the drug developer kadmon. What is the next catalyst for that company . Plus, the ice bucket challenge went viral in a big way as you remember raising hundreds of millions of dollars for the fight to treat als. Guess what, it may have found a major breakthrough. You need to hear about this next. S built with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Which adds fuel to my bottom line. Whats in your wallet . Hey, welcome back. 39 minutes after the hour. Shares of drug developer kadmon sinking on their first day as a public company. A high profile name may be behind it, but the question is whats ahead of it. Meg tirrell is here, but before we get to kadmon i understand theres new developments and news on teva pharmaceuticals, meg. Thats right, brian. A lot of people have been waiting to hear from the ftc on its decision on whether this allergan transaction can go through. Remember teva agreed to buy generics business for more than 40 billion. There was some questions of whether that could go through. Now the ftc is sayings teva must divest 79 drugs in order for that to happen. We are seeing allergan stock rising on this news that looks like this actually will go through, brian. Okay. Also, can we get to the kadmon news. A lot of people listen, if youve been around the biotech business for a while, you understand about the name sam waxel, then went to prison, whats his role in kadmon . His role right now is nothing, brian, thats because of his past with his former company inclone. Folks will remember his name, he founded this company that developed this cancer drug, but then he was embroiled in Insider Trading scandal that sent him to prison. Also ensnared martha stewart. Thats how people who dont know biotech know sam waksal, however hes founded a second Biotech Company and thats kadmon. But because of his legal issues hes not allowed to be involved in that company which has just gone public on the New York Stock Exchange today. His brother, holland waksal is the ceo and we had him join us on Halftime Report today to talk about the future of the company. Heres what he said. Whats really key about what were doing is the drugs were developing. And i think the attention, the great deal of the attention is the same thing that took place in the introduction, its been a lot of focus on the waksal brothers, on history rather than on the present. And the present is what is important. This company has three drugs moving in development. And the drugs that are moving in development are ones for a diverse portfolio of various indications. So tough first day of trading for kadmon. But Harlan Waksal saying theres a lot of drugs and data to read out this year and future years and a lot of Big Hedge Fund names in this name. We also note perceptive, a very high performing Biotech Hedge Fund is also in the stock. So bad performance on the first day folks hoping that will turn around. Or implying that there was a waksal penalty reflected in that first day performance, right . Thats right, tyler. Thats a lot of what we talked about the idea all this Media Coverage on the scandal and not as much focus on the science. Lets turn to news coming out of the als world, which is otherwise known as lou gehrigs disease. We all remember the ice bucket challenge brought in a tremendous amount of money, and now there may be a genetic breakthrough here. Tell us about it. This is pretty exciting news. A lot of us took the ice bucket challenge. Remember, this raised a lot of money for the Als Association and als research. Now two years later that looks like its already translated into something pretty significant. Researchers have sequenced the genomes of a lot of als patients and found similarities among some of them. Turns out variants are found in at least 3 of the population of als patients they looked at. So this is years off from potentially translating into something medically helpful, but people are very hopeful about this advance. Meg, thank you very much. Meg tirrell from nasdaq. Facebook set to report earnings today after the bell. The stock has been on a streak up more than 28 since january. Can it keep up its recent growth . Lets bring in victor anthony, managing director at axium capital who is bullish on the stock. And Ali A Facebook analyst at morningstar who is a bit more cautious. Ali, let me let you go first. Make the case for why youre cautious on what is really been a juggernaut of a performer in social media and media and advertising. Sure. Actually, you know, these guys have basically been hitting on all cylinders the last few quarters. Theres no question. However, you know, i think the market should expect some deceleration in Revenue Growth in the second half of this year. And thats something the management hinted on. And we just think theyre pretty much pretty close to the fair value estimate weve given them which is around 120 a share. So, again, given that we expect some deceleration in revenue during the second half, and 2017 may not revenues may not grow over 45 , were being a little more cautious. But certainly a very Solid Company and again hitting on all cylinders. Victor, unpack the stock for me maybe addressing some of alis points and my question which is if i were building a sort of Core Portfolio of technology companies, i would want facebook as one of them for sure. Yes. Clearly. And i think they are position for users coming out of twitter theyre struggling. Facebook doing well, instagram doing well, i have a 150 price target on the stock. Yes, there was some nervousness and questions on the performance, i think the numbers will decelerate but the numbers will be strong. I think the fears about snapchat destroying engagement on facebook i think will be proven unfounded. I think engagement goes up. So i think the one way for facebook i think is long and wide is multiple different optionalties. I have yet to make their way into street estimates which is whatsapp, messenger, when they stop making estimates to 17 or 18 i think theres a lot more valuation support, lot more valuation upside. Quick final thought here, ali. Whatsapp is very interesting to me. How do they make money at it . Or how do they plan to . Actually, theyre not currently making much money out of whatsapp. Thats what i thought. Yeah. What theyre doing, i think, you look at the other messaging app they have which is messenger and the other analyst pointed out the correct thing in my opinion which is what theyre trying to do to monetize messenger more effectively by adding chat blots which allows them to put in some more negative ads. And also, you know, they integrated their instant articles with messenger. So it actually provides more content for the users. So thats an example of a couple ways these guys can further monetize messenger and maybe in the future move onto whatsapp. All right, folks, thank you very much. Victor, ali, appreciate youre being with us. Thank you. Shares of this luxury retailer up more than 30 this year. Has it found the next leg of its growth . Well, were going to find out. Even though its fed day, we still have street talk. Three new ideas custom made for you. Were back right after this. Its a golden opportunity to experience breathtaking lexus performance in streetlegal form. For a limited time get great offers on our complete line of f sport performance vehicles. At the lexus golden opportunity sales event. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Its time for rapid fire. Fed day street talk. Thats our daily dive into key analyst calls. Here we go. Stock number one, edwards life sciences. After earnings j. P. Morgan chase reiterating this company top pick and raising their price target. The analyst says the results impressed again. Eps 6 cents a share ahead of consensus. Management also raised some key forecasts. By the way, third guidance increase in the past six months for that product that i mentioned. Six months for the product i mentioned pl p. Target goes to 130 from 120. Stock up nearly 40 this year. Second stock, coach, upgrading to outperform from neutral, the luxury retailer we just referenced. They believe stabilization and coachs core business is coming combined with a possible acquisition narrative thats their word could help drive earnings power longterm. Annuals look at a variety of bear and bull concerns. A 19 possible down side in the bear case although analysts said coach is quote the best Position Company in luxury. Going from 47 to 42, about 9 more upside. Final call, under the radar name of the day is oil Company Mcdermott international. Upgrading to outlook overweight from neutral and raise the price target of mdr to 750 from 550 a share. Noting the company handling the estimates for quarter could also like bag log of future business and book to bill ratio including big projects in saudi arabia. This, after cuts mcdermott made, the company right sized the ship. The 750 target is about 50 more upside on a stock already at 50 this year. However keep in mind it was a 33 stock in june 2008. Whats mcdermott do . Oil services. Like offshore . No, onshore. So they might do a little bit of both but theyve got three big projects they are working on in saudi arabia. Down a couple of bucks. Now 5. Now 5. And they think they are going to 750. So when you buy. Yeah. Been a great stock if you owned it for about four months. Street talk. Now time for trading nation. Lets take a look at stocks as a whole as the market digests the statement. Chris with stra teeth ib research partners, larry, earlier in the show, i said during our fed seg amount that who cares a quarter point rate hike means nothing. And writing in politely and saying brian, like it but youre completely wrong even quarter point with the leverage in the system is a bad thing. He is right . He is spot on right. One of the things that we have been sharing with our bear trap subscribers over the last year is the fed is asset price sensitive, not data sensitive. So the problem is, youve got yellen with an election coming up, she is going to be up for reappointment in 2018 and as asset prices rise they get more hawkish, the dollar rises, which is happening. Dollar moved sharply above 97. When that happens, all the assets, all the leverage in the world, tied to the dollar, so all of the oil debt, commodity debt, emerging markets debt, all of that lef rej gets under massive pressure as the dollar rises and we eventually go into a risk off and the fed backs away from the eventual hike it starts talking up. That is coming at us right now. Chris, are you as nervous as larry is assuming a fed hike. You have to remember you never want to shore a dull market. After the impressive breakout two weeks ago, the market spent the last ten days consolidating. We think thats a constructive pause. Two things are important. Number one, s p is doing better than market weight s p. So market stock is doing better than the index here. Thats an important change. Secondly, leadership has gotten more cyclical. Industrials improved. Those are two groups we want to be in and we think we set a fairly good tone about the back half of the year here. Good tone there. Little concerned about the fed over here. Thats why we do it like this on trading nation. Larry and chris, thank you both very much. Folks, two additional segments everyday. Trading nation. Cnbc. Com. Twitter follows stock down 14 right now. We will get more on twitter, more on overall markets and more from the dnc, all coming up. And now the latest from trading nation. Cnbc. Com and a word from our sponsor. A. We hand off to bill and kelly here in just a minute, lets show you where the industrials are. They were flattish to down as we headed into the fed meeting. Apple, number one stock in the dow up about 7 holding on to the gains that it made in afterhours trading last night. Mcc is down in philadelphia. It will be a very interesting night. The president , mr. Biden and maybe perhaps most interesting of all, mr. Bloomberg whom i am told, rumor has it, that he is going to be an extremely aggressive in taking the case against mr. Trump to the floor. One new yorker against another new yorker at this point, right, tyler . Yeah, we expect Michael Bloomberg, former mayor of new york city, to expect and then we will hear from tim kaine, Vice President ial nominee. He is expected to officially accept the nomination. And of course president obama tonight as well. Then Lenny Kravitz will be sprinkled in there as well. We heard his sound check earlier. That was pretty cool. They will do some version after dei dei deion worwick song during the day too. If nothing else, cheeky, off the cuff about basically saying russia, a if youre listening, i hope you can find the 30,000 emails that are missing. Cheeky but clever. Yes. It changed the conversation completely, right . From bill clintons speech last night, as you pointed out. Thats what democrats wanted the narrative to be today and the enthusiasm for the president and mr. Kaine tonight. Hoping it would be about repositioning Hillary Clinton. She is a good person, a nice person. You heard that over and over. But immediately donald trump seems to hijack the whole conversation and democrats were horrified to hear him discuss russia potentially hacking into her computers and her emails. But at the same time, what are we talking about today . Once again, we are talking about her emails at this point. They cannot be happy about that. And ive noticed everyone youve interviewed, one word they talk about over and over is unstable. You that i is what they talk about with mr. Trump. Unstable, and thats what they say about donald trump. Seems like they might be talking points. Im just guessing, michelle. Talking points in a campaign, hardly. It would be hard to believe. Michelle watching the rest of the day. And watching you from the special at 10 00, Democratic National convention. Thanks for watching closing lunch. And billy and kelly willie. Welcome to the closing bell. Im kelly evans here at New York Stock Exchange. Im billy griffith. Yes, i do answer to that. Threeday losing streak since june. Those expectations were not all that high. They have been lowered heading to that report. In fact that analyst issued that sell recommendation the day before. What does this now mean we wonder