Expectations china vowed to retaliate against u. S. Tariffs set to go into effect september 1 were now on track for a higher open lighthizer said its not possible given your past behavior so an awful lot to absorb today. Very interesting that the futures are up exactly the amount they are right now. They issued a very strident set of words toward us at the same time, announced stick l stimulus for hong kong where is what the president said on twitter what happened and without that, i think theyre going to view the olive branch of moving back to december as an illadvised move because the chinese arent playing ball were going to have Chuck Robbins later on this hour the chinese derailed their outlook. Asking them not to bid on business things are getting very, very tense. If we let that dominate the headlines and forget to look at what walmart said today, i think well have a false narrative because of how bad things are. Remember, we are not a big export nation. But yeah, the gloom is pretty palpable this morning on today show you said we need to dial back hysteria, this does not have to end poorly, we can avoid recession. Yes, janet yellen had calming words yesterday. Basically saying, look, just because we have the yield curve do this does not mean its etched in stone. This is not a train wreck that has to occur its manmade if it were involving credit and you and i not being able to credit along with the rest of america, it would be different if it was involving derivatives that we didnt understand, it would be different if it were involving a crisis of confidence that made it so no one wanted to spend, different but we have high employment. We are still spending. Im getting that from numbers that came out today. So i absolutely dont like the tenor of the discourse, but i also am not oblivious. I called it chernobyl yesterday in a talk i gave on the street we dont know. There are people who said chernobyl had to spread to sweden and therefore germany then theres what happened, which is that somehow the bumbling soviets stopped chernobyl, but it was scary. Fukushima, scary it got under control this is one of those thing where is it can get under control, but it doesnt look like it. I was talking to some bond traders last night they said, you know what, jim, we dont know what it is, but its bad thats how people are reacting when you see bonds doing crazy things and the bond market is twice the size of the equity market wow, i dont know, but im going to be nervous. Do you think the 30year below 2 is crazy yes you do . Does it not deserve to be below 2 . No, it doesnt because theres got to be money coming in from overseas janet yellen talked about that i do think that what it does say lets say it is socalled for real because it is a trilliondollar market then jay powell should come out today and say, i see these things im going to take back what i said about midcycle adjustment as long as hes being taubtntedb the president , its hard to say, you know, im going to give him what he wants. Im going to protect the institutions but if he came out right now, as Alan Greenspan did october 8th of 1998 and said, you know what, ive got your back, then i think a lot of this hysteria would go away there are people who say it doesnt matter what he does. Thats total false narrative of course it matters i think this would be a once in a lifetime opportunity for the United States to take advantage of these i remember, a hundredyear Russian Railroad buy we want a 50 year. We want a 50 year. Give it to us. How does he say, ive got your back, when weve just had the biggest jump in retail sales in four months you have got productivity 2. 3. Philly fed double the estimates. Whose back does he need to have . He needs to react to what the bond market is saying, not to that data. Or he could come out very easily and say, okay, look, the data looks really great right now, but we dont know whats going to happen. Im a student of the bond market im wary i like whats happening right now. But you look at walmart and walmart had amazing numbers, but i have to tell you, i think walmart is responsible responsible for the lack of inflation in this country. Of course and its a broad base hundreds of millions, people go there. I say, look, theres no inflation. So its no harm if powell comes out and stop the rhetoric we may tighten, we may not. Just say, look, were cognizant. We like the numbers, but were cognizant things could go off the rails. We certainly dont think they will, but were ready. Youve got to say those things if youre just quiet speak softly and no stick, i dont care for that. Well, jackson hole is around the corner, but well see if he needs to speak before then my daughter went to jackson hole its an instagram its heaven for instagram. If the fed chief were a little lighter, he could also deal with the criticism of the president hes a little too and i dont want to give him acting lessons, but hes like the early fonda before he got his game theres some performance to the job. You know. Hes not olivier for certain jim mentioned walmart one of the bright spots today on better than expected quarterly earnings, revenue, and comps company also raising their fullyear guide for u. S. Comps and earnings jim, the Economic Health remains strong some discussion about obviously security in their stores given the events in the last couple weeks, the degree to which theyre a supplier of guns and ammunition too dramatic guide up, really strong samestore sales. A refutation of what happened with macys yesterday. Remember, every day low price is a winner when youre running full price the way macys is, whos a loser, its a shame. This kind of quarter where you see amazing ecommerce growth, 37 . I mean, that is a rival to amazon i would call my team and say, we got to step it up. Were not going to let them beat us of course, walmart is still behind this was a remarkable quarter. A reminder that the hysteria that some may want to spread, which by the way is happening in some quarters. They should look at this theyre looking macro. To look at walmart for some of the people who spread hysteria is to say, you know what, im not going to look at that. I know better. Let me tell you, walmarts numbers are more informed, quicker, and more on point than anything we get from the government this is a very good report i want them to concentrate on the noinflation component there are many people who say with tariffs, there has to be inflation. This company uniquely is able to battle inflation because of how good its supply chain is and how good Doug Mcmillen is. It gives powell the cover to say, look, ill do whats necessary. He didnt say that last time do i want him to say, i was a knucklehead and shouldnt have raised in december no, thats for me to say he doesnt have to have that so youre going with walmarts quarter is a signal of consumer strength, not of the consumer searching for bargains or graduating down its consumer strength. As a walmart shopper, i can tell you theyve got some things that are inexpensive that are expensive in other places. So the answer is the consumer has this, okay, and knows value. This is producing walmart. You press ive got my walmart app. When they started the walmart app, it was like best price for cheezits and velveeta it was a suboptimal site now its gotten much better. Its a goto place just like amazon americans have to recognize, they should check the app. Its a good app. It would be better, obviously, if macys had a different print and if tapestry today did not have kate spade. Revenue below Specialty Stores are doing quite bad. Mallbased stores obviously terrible that macys quarter was really a shocking, shocking quarter you also had bad execution Urban Outfitters has always talked about this. If you get fashion wrong, youre really finished. They got fashion wrong, inventory wrong. It was really hard to unfortunately, im going to say this really hard to do worse and yet still might have to cut your earnings that much that was a false hell. But those Big Box Department stores are not in favor. Look at nordstrom. Remember nordstrom said they didnt want to pay more than 50 to be private. Well, that was where are they nordstrom by the way, of the list of s p names off from their 52week high, its in the top ten. Oh, yeah. So is kohls i thought kohls cash, not being facetious, was good, but theyre not every day low price. They have a really good deal with amazon where you can return goods there. Thats not mattered at all you need to deliver a walmartlike quarter i think target is going to have a good quarter because the stock is so down, that may be the opportunity. Theyve got a good yield stores are beautiful but right now, were looking at a market that is certainly better than we had, with the exception of our interview with Chuck Robbins. Chuck has some explaining to do. Chuck knew china was weak. I think were going to hear chucks explanation that china did fall off a cliff even if its only 3 of your business, thats 3 too far. Its down in the premarket. Current quarter guidance below expectations at this level, it would be the biggest gap down on earnings since 2013 according to bespoke. You mentioned guiding below for the quarter. China down 25. Right they have a lot of business in telco. Theres a moment in a Conference Call where they were told to not bid. The chinese said dont be id were going to unbid you that was a breathtaking moment but the rest was very strong and i think theyre practicing i think theyre underpromising so they can overdeliver. I think anyone who thought china, even at 3 , couldnt hurt them was, lets just say wrong i was part of that i didnt think that i didnt anticipate china would just basically end for them but the reason the stock isnt down more is because i think people are starting to look and say the jpmorgan piece, which is very good, just says, okay, look, they have an abundance of caution. Kelly cramer had so many good things there were a hundred words that were wrong, i mean, a hundred words that were negative chuck had this amazing moment where he said, hey, listen, what are you doing . I thought china was small. China is small, but its small on a big mosaic. Were going to talk to chuck in a moment. And i think chuck is going to illuminate things. When you point to things about the bidding process over there, do you think its a canary in terms of the qualitative measures chinaing sti china could still take in retaliation . Yes on the Conference Call, you had hints of the idea that theyre getting what we used to call the heisman. Theyre really being told, look, were going to use all commodities made in china, even if it may not be the best. Commodities are supposed to be, whats the difference . I think theres a qualitative difference between a lot of chinese equipment and american equipment. Obviously but theyll switch to chinese. Look, theyre not just doing the rhetoric theyre saying, hey, listen, we dont want you so its kind of if youre over there, they dont want you and the president doesnt want you vietnam is open for business 100 Million People, but vietnam is, theyre getting there. Youve talked about the logistical capacity, worries these nontariff countries still have they just dont have the supply chain to get the big ships there and send them to san francisco. Vietnam is anamazing country anyone who remembers certain operations they did during the war and i know a lot of millennials dont even know this they can accomplish great things, greater things than the chinese. What youre saying reminds me of Tom Friedmans call this week quote, i suspect chinas leaders are drawing up a list of Industrial Products for which theyll never allow themselves to depend on america for again think thats true . I think if they dont care about quality of materials, yeah there are instances in the steel theyve sent us that was subpar. They seem to not care as much about precision. If you decide youre not going to use emerson, a huge business over there, 3m, if youre not going to use honeywell, what are you going to do . Yes, maybe you can make it why . Because youve stolen so much of our intellectual property. If you steal it, then i guess you can make it. But i think that the rhetoric i think in its entirety, people think that china is equal to us. Its an economic power i think the chinese are doing many things that projects power, not unlike people dont like it, but i use the analogy. Not unlike the soviet union. It was 28 Million People in world war ii a lot of people would say they won the war, even though we know the great sacrifice our country made people should remember they had the hbomb not long after we had it thank you, some americans who gave it to them. Were getting strul production as we speak Rick Santelli, lets get that number we had a lot of really solid data unfortunately, Industrial Production isnt one of them Industrial Production a minus sign, down 0. 2 were expecting a number up 0. 1, up 0. 2 however, we have a mitigating factor here. Last month was technically zero. Really, it was a minus number. If you rounded it off, it was zero heres the part i dont like utilization, i guess we shouldnt be surprised at this considering whats going on in the world. 77. 5, carl that is the slowest rate of production since october of 17 when it was 77. 3 so want to Pay Attention to that unlike Industrial Production, utilization actually had a downward revision in the Rearview Mirror but only subtle. 77. 9 to 77. 8 so that didnt match up with some of the earlier stats, and the bond market itself is holding the tens to twos rates barely above where they were yesterday, not reflecting the fundamental move they should have had on earlier data carl, jim, back to you all right, rick aerospace yeah, big piece and look, a shutdown of the line of the 737 max is something that would impact. We are a great exporter of airplanes. Theyre delaying the latest 777 long range today i emphasize there are a lot of people who think boeing skimps on safety ill take every one of them on well get cramers mad dash, countdown to the opening bell. Obviously weve got to get to ge this morning on this report from Harry Markopolos well do these s. E. C. Filings, buffett on amazon. Were back in a minute hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Cramer watching some new takes on apples phone cycle two positive reports. Im going to do the headline despite china worries, iphone demand cycle looks stable heading into fiscal year 20 thats rev la story, actually. Then a good piece by davidson. Lots of people cover apple lots of people do quality work heres a review of their 10q, which is a statement they publish for the s. E. C. , talking about how its a very good projection for Gross Margins and talking about authorization of more buybacks. One of the things i think these reports are explaining again is that there is that Service Revenue stream i do think that they have to when the card and weve seen the card comes out, we need to know if people are using the card we need to know about other streams theyve added. If they can get more of a razor blade model, they can do the unthinkable and take out this level. It is amazing that china could be strong for them, and these two pieces indicate its not bad given everything we hear and its counterintuitive. When are they going to tell apple get out of china the answer is are they going to take away 2 million jobs the Stateowned Enterprises there are showing declines in unemployment theres a camp that says china is invincible. Theres a camp that says china is falling apart im saying theres a camp im in this camp its decelerating and the party doesnt want it to decelerate. By the way, i think they think that the president uniquely believes that theyre the pajama party. I mean, when you make fun of the party, which i do feel that sometimes he does, when he takes them on, it is discouraging because that should be done away from twitter, i think. Its illadvised to make fools of them in the public. You sound a lot like the journal oped page today telling the president to stop with the basically call a trade truce. I mean, i think that wouldnt be so bad. He should go the way of musk when it comes to twitter we dont talk about musk anymore. You know why he doesnt make stupid tweets. Not to say the president makes stupid tweets. Its just not a great way. I think if jefferson had twitter, i just dont think hed go at it jim, were going to watch apple. Obviously in the green along with futures well talk to Chuck Robbins of cisco as well when we get the opening bell in seven minutes. As you know, coming off not just the worst percentage decline of the year but the first close for the dow below its 200 dma since june futures are green as were riding the coat tails of walmart. Back in a minute you should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Youre watching cnbc squawk on the street. Live from the Financial Capital of the world the opening bell in just under two minutes. Its been a heck of a week and remains so today cisco and walmart are going to counteract each other on the day today. I think thats right. I think cisc