Welcome to you you and i were chatting about the new space spot that were going to talk about. How is that indicative to risk in this market. You have a spak, which people doing it as long as i have they know the history but its essentially a blank check to merge with a company thats going to take people to space. What does that have to do with the fed it has to do with the risk mentality of people out there. If the fed is going to drive rates down to the negative, people are going to go out and try to find Investment Opportunities and i think this is the perfect metaphor what we saw in the markets the facts were talking about stocks like chewy shows the mentality here of how people are thinking. Lots to discuss over the next hour welcome back. Great to be back. Wouldnt miss a pepsi earning day. Mike doesnt hear its an important company. The word he used is improper hp his words not mine Morgan Brennan has galactics plan to go public. Susan has details on a trade rift between President Trump and india. Morgan, lets start with you. You laid the ground work with the chitchat about space so Virgin Galactic and sophie are merging to form the first publically traded human space flight company, sch will invest about 800 million for a 40 stake. So Virgin Galactic charging 250,000 to take tourists to the edge of space. This is a service that expects to offer in a year over 600 people signed up. This will be one of the big new industries of the future the market is enormous, the amount of people that would love to go to space is enormous once we have a lot of spaceships, itll enable to build a lot of space ships, the price will come down and that will increase the market more. Theyre also invisioning hyper sonic travel around the world. Meantime, expect this company to be profitable on an analyzed basis by august of 2021. Are they ahead of jeff bezos and elon musk . Everybody focussing on Space Tourism in a different way i would say theyre ahead of blue origin, which is the most direct comparison, tourist flights to space, to the edge or past the edge of space, because they have done two of these with people on board. Whereas blue origin has not yet done its crude test of its vehicle, theyre expecting to do it by the end of the year. More or less, youll see both of the companies if all goes according to plan beginning to bring paying customers to the edge of space. Spacex is the orbatable side of thing, so is boeing. Both of those Companies Got the green light from nasa to bring private astronauts to the International Space station as soon as next year. Turning to boeing. New numbers out for the month of june phil we did not see a good month in terms of orders for the 737 max, which has been grounded since the middle of the march, in june no new orders for 737 max. That means three straight months with zero orders for the plane the bag log has dropped by three planes thats the order side of the business on the delivery side, look at thousand things have slowed down just 113, 737s were built. Their deliveries way off compared to last year in the first half of 2017 why is that important . Look at shares of boeing versus air bus. Air bus out with order and delivery numbers today, air bus is on pace for the first time in seven years to deliver more commercial airplanes than boeing and that partially explains the split between the two stocks there in the last month and a half thank you were watching two stories in the food space, pepsi co and General Mills. What can you tell us i can tell you folks are ingui indulging in snacks and sugary drinks just smaller portions. Pepsi co highlighted 4. 5 . And people are buying smaller stacks, which means pepsi gets more out of the growth pepsi is growing led by small cans and new flavors and quaker oats saw growth this year not so much the oatmeal but other pantry items we talked to the cfo, he said most of the portfolio of snacks and drinks is working well in most corners of the globe right now. Listen. It is really broad based. Were seeing terrific results out of the fritolay north vision beverages doing better and International Businesses doing well, growing and emerging markets. Check out the stock, the market has caught the story. Pepsi is up 20 so far this year outrunning cocacola, its arch rivals General Mills has done better. They have their investor day the companys ceo stopped by for an interview to tell us what hes doing to drive growth in that food company. We want cereals that taste good americans are snacking more than ever and we have great cereals so were doing well. Do you think it comes back to its glory days its improved eight quarters in a row it takes responding to consumer deman, thats why weve been able to grow it because we responded to consumer demand better than the competition. He did call out execution problems in the snacks business last quarter there was a drop in the stock missing key friends on breakfast bars i think the key take away is the companies are highly valued. It was years ago all about cost cutting. Now the focus is on growth its going to come from innovation, seeing it in pepsi, General Mills, talked about the cinnam cinnamon toast crunch krture ro. It shows you dont have to make everything healthy and full of protein, there are other ways to do it. Theyre bullish about bubbly. What is bubbly is that a health play . Its a health play, its a trend play this is the sparkling water brand announced by pepsi just in early 2018 it was basically nothing now the call, the ceo said can be a billion dollar brand soon and beyond that, national beverage, stock has been on a one way ticket lower and a lot of the focus has been because pepsi, through bubbly, and cocacola through dasani and some brands are growing. And sparkling water is growing 20 . And pepsi stock today, whats happening there . Initially it was strong. Expectations was going to be good you saw the stocks so far into the numbers. I think people are shifting out of stuff thats safe and moving into risk assets so pepsi is not exactly the most exciting story theyre saying Health Care Premiums are never going down, basically. We will be discussing pepsi again later in the show. But lets turn to trade as the president sets his sights on a new target, india. Theres another trade war brewing in asia, this time it is with India Following what seemed to be a constructive meeting between the president and indias Prime Minister at the g 20 in japan. The latest tweet from President Trump this morning suggests the u. S. india trade talks has stalled. Trump tweeting india has long had a field day putting tariffs on u. S. Products this comes as they put tariffs on 28 products in june with india taking a more protectionist turn, tensions are not expected to die any time soon. White House Counsel economic director larry kudlow sitting down with kelly evans today giving his take on whether the fed should remain independent. Let me say, i personally believe the fed should be independent. But that word independent, it doesnt mean they operate from another planet and as arthur said, the fed reports to congress, and thats in the constitution. And the fed is appointed or the governors are appointed by the president. So i think in a daytoday sense certainly theyre independent. But that doesnt mean that they shouldnt listen to advice from their elders trump and kudlow both in their 70s, j powell in his 60s bob, as a Market Participant what do your clients make of President Trump just hammering powell over and over again, but then larry kudlow coming out today and saying hes safe lets start with the kudlow comments i think that larry said it right. There are checks and balances in our system the fed is appointed by the president but then they report to congress. I love that listen to your elders you could reads it different ways i listen to my elders, they have wisdom from time to time sometimes they have wisdom, sometimes they dont i think thats how the fed would proceed. Meanwhile the president loves to bash the drum on the feds as often as they can. I hope they stay independent in their minds. Do you think they are independent. No. I would say every day it gets worse. He would have to be inhuman not to feel the effects of whats going on inside him. The president made it clear, hes jealous of countries that can press the button on monetary policies the president is incorrect when he says the other countries do that. So what exactly is powell falling under pressure on . Do you think he fears hes going to be fired . I think he fears hes going to be fired, but more importantly i think theres a perception around him if the economy fails its going to be the feds fault and you can continue to see this picture being painted from everyone around the fed so i think theres a huge amount of pressure to retain the expansion, which means were going to put our foot on the gas and press it more as we get closer to the election. If the fed lowers rates at the next meeting do you think those questions heat up . Certainly the questions will be asked, why did they do this my view is the data will determine things they said that, i believe them the data says maybe we should take the december increase and take it back in lower rates. Forget the independence decision, the question will be how weak is the economy then we have to worry about earnings once is fine, two or three times we have weaker earnings than most of us think. What do you think about equity markets in general at the moment i think equities are full one of our predictions this year was revenue and earning growth was too strong in the forecast for this year and next, its come down a bunch this year im still concerned about next year analysts have earnings up 11 next year. My guess is its going to be half that. I think were moving into the earnings part of it. We talked about the fed and trade and thats not going to go away but earnings are going to matter in the next few weeks and i think theyll be mediocre. Bob, thanks for joining us. Thank you. Still ahead well discuss Virgin Galactics plan to launch into the market with tom farley. Runs a spak of his own. He does levi set to report after the bell, second report since going public as we head to break, heres a check on our closing bell data tracker. The june Small Business optimum index came ahead of indications, 103. 3. And job fell 7. 3 in may. Were back after a break [ dogs barking ] what about him . Lets do it. [ sniffing ] come on. This summer, add a new member to the family. Hurry into the mercedesbenz summer event today for exceptional offers. Lease the glc 300 suv for just 419 a month at the mercedesbenz summer event. Going on now. 42 minutes left of trade heres a check on the dow. Down 74. It got as high as down 58. Unhp g taking down the Dow Jones Industrial average lets look at todays market dash boards. I miss these when im off. Heres the lineup for today Fan Favorites is what were going to start with. Analysts are getting more excited about the potential upside for individual stocks hate the player, love the game thats the reverse of the typical saying but in this case ill tell you why it makes sense when it comes to wall street hit lg for the cycle maybe a perking up of cyclical stocks and bonds looking juiced first Fan Favorites. Facts that keeps track of the implied s p 500 target if all the individual stock price targets among all analysts were reached if you look at the consensus right now, boil it down, each stock target if they got to that target, what would the s p be at right now. This is the red line it would be at 3218. So its about an 8 upside move from here. Relatively aggressive but not extremely so this is overly optimistic, sometimes its a couple percent down below that. One takeaway i have is its flattened out, as the market has gone up thats the implied forecast in one year over the last couple months, so its not gone up much its not up much from here which would have been effectively one year ago back in the fall. So i think some optimism is perking up, but its not yet quite to a point youd say everybody is so bold up, an 8 move in the s p it would be hard to argue with in either direction. But i would keep track of it to see if it gets more exuberant as we go on does it usually act as an indicator over the longterm not so much the magnitude of it it typically stays ahead of the market and is always a few Percentage Points above. On a one year basis its a little bit more than 2 over optimistic but wide variation around that. If the market goes down 10 and this doesnt budge muches it looks like the analysts are saying were having a huge snap back. Analysts caution does that make you bullish not really i dont think they have an idea whats going on right now. I think its an example how the multiple will expand or contract on the in number based on where the fed is, the china trade issues are. Nobody noknows. Nobody knows. But the more the fed tells you were taking rates lower that expands. After the break, a downgrade for components, a tortilla problem for one chain. Check out todays move in the peso falling off the dollar after mexicos finance minister resigned it all started under this buttonwood tree. Twentyfour people came together to sign an agreement that created the Stock Exchange. Just the right elements coming together. It started when scores more people came together, just down the street and traded bonds that helped pay for the revolution, and the nation it created. It started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. It started with the markets, bringing together steel and buildings and silicon and medicine and rockets. We believe the possibilities of life and investing are greater when we come together. Its why for eighty years weve connected ideas with technology, data with inspiration, investors with solutions. So that every day together, it all starts again. Virgin Galactic is planning to go public. Its an exciting time aviation began in a similar way. It was wealthy people wanting to go for a joyride basically its about capitalizing something that will do Space Tourism to hyper sonic air travel. Were the only Company Whose space ship is shaped like an airplane welcome back to the closing bell bank of america putting out a note, a 10 inch tortilla shortage could be a near term headwind for taco bell its retail. The Firm Maintains a neutral rating on yum and raised its pricely slightly. Chewy, the pet food retailer, j. P. Morgan, ubs, bank of america wells fargo all out with a stock. And then theres the downgrade of rbc 3m. The firm citing macro pressures, cuts, and persistent litigation. And their reputation as a high quality industrial is eroding. Having a Market Impact on top of whats been a rough ride for 3m the question is what does that say about the market environment. It used to be a leader and a tell is that still the case its still the case, its a diversified industrial, a big company. To me it sounds like the analyst is behind the curve. I dont think theres anything surprising there. The analyst is playing catch up rather than this being a leader indicator. They said things arent good, said it a few times. Then theyre saying its time to get off the story. To me it looks like it maybe time to buy it. On chewy two of the three price initiatives come at 40 bucks. Do you like chewy . I like it because i can make up numbers like everybody else does they create an Addressable Market pr pets out there and next thing stocks are 40, 45 because how do you refute the numbers. Thats why its dangerous to short the stocks too early. You dont think its a fu fundamental . No. This is a business that amazon or someone else will put price pressure on and the story rolls over. I was reading about the 10inch tortilla shortage, i didnt know that thats whats driving their breakfast. They have 6 and 12inch as well and theyre managing the short fall by managing the size of tortilla they want the 10 inch to be for breakfast because its an important part of their menu, apparently. I enjoyed reading that as well still to come, we have your last chance trade and todayit a stock that gained 40 this year plus pharma stocks on a key ruling regarding drug price disclosur disclosures. Dow is down about 83 with about half an hour till the close. Welcome back 30 minutes left of trade at the moment the s p just flat, dow is down 80 points. Here are three things driving the action investors are waiting chair powells testimony tomorrow. Fang stocks are showing strengths and transports are weaker. Time to get a news update. Hello, everyone, heres whats happening at this hour. President trump welcoming the emir of cutter to the white house. During the photo opportunity the president was asked if if he still supported labor secretary alex acostas handling of a sex trafficking case involving jeopardy epstein. I know hes been a really great secretary of labor the rest of it we have to look at, look at it very carefully, youre talking about a long time ago. It was a decision made, i think not by him but by a lot of people. Uber is letting passengers tell their drivers inadvance that theyd like a little less conversation and more regular room only if theyre willing to pay. The company launching a comfort ride and nikki minaj is pulling out of a concert in saudi arrabia thats your news highlight. Is uber saying you have to pay to have less conversation . Apparently yes. I think you could close your eyes. Put the headphones on, even though theyre not playing any music on. Youve been in a an uber with me when i did that, i think. Just teasing. Ouch. Fair play. Not directed at you well, anyway. Either way sue, as always great to see you, see you next hour. Meantime, lets send it to mike for the second dash board. I think i worked this out. Have you . Its a cricket theme. Close cricket will have to translate for you later. Hate the player, love the game what am i getting at here . Look at this group of stocks some of them are tr