Performers on the dow this year. Can it continue to impress . We will get you the numbers and what they mean for shares first with the best analysis we can offer. And do you shop differently than you did five years ago . I know i sure do. What do you buy, how much do you spend, how do you spend it, what you acquire. We have interest data on what American Consumers are doing and how the retailers are reacting. Stay tuned for that just ahead. And heres where we stand in the markets with an hour to go. The dow up about 85 points, making a run back towards the highs of the session, when it was up 109. The s p 500 up about 11, 1,915 at present. Joining our closing bell exchange, Keith Fitzgerald from money map press, jack brujon from index financial partners, Abigail Doolittle from peak theories. David kudlow is from mainstay capital management, and our very own Rick Santelli is with us as well. Abigail, let me begin by asking you, the retail Sales Numbers, macys numbers are not particularly encouraging today. What is the market seeing that i dont . Thats a great question, tyler. Its amazing the shortterm memory of this market. Last week we were looking at all these geopolitical risks and now the market is rallying on weak retail Sales Numbers, a disappointment. We have not seen the rebound from q1. I think the consumers getting cautious here. Beyond retail sales and macys, from a technical standpoint, walmart, which is reporting this week, target next week, both look set to break down, but i dont think its just the low end. Also nordstrom i think looks like it could get hammered a bit. So, i think the consumer is finally being affected by all these uncertainties, geopolitical risks, the uneven economy. 70 of gdp is the consumer. I dont think were going to see the secondhalf recovery, and i think the stock market is going to reconnect with that reality. Right now, though, i am with you, tyler, its pretty amazing. David, what about you . How are you guys allocating here . Well, we think that the longterm secular bull market continues. Weve had a lot of conversation about this on the show over the past several months, but as we look forward, we see that earnings are with us, the economy will have a good second half, but we are concerned about the nearterm geopolitical tension and also the fed quantitative easing that ends in a couple of months. So, we think investors should still be long stocks but should also be hedging their portfolio looking for opportunities in undervalued areas like emerging markets that offer opportunity and even some hedging strategies, managed futures, hedge firefighters. Futures. Are you worried about one of the president ial contenders dying in a plane crash . I asked because you bring up the emerging markets issue and wonder if there are broader followthroughs that people need to be wear of. Unfortunate for that country because that particular president ial candidate was seen as one that might create a motietype moment for the country, so maybe a setback there. But looking broadly across diversified markets, investors can invest through the diversified emerging market etf. Looking at asia and the recovery from the lows last year. We think there is a long run ahead of us in emerging markets and an opportunity for investors. Keith, is todays reaction in the equity market to these retail Sales Numbers that i just asked abigail about another one of these cases where mr. Market has looked at the numbers and said to itself, ah hah, ms. Yellen and the fed wont raise Interest Rates in march now, maybe it will be april or maybe it will be may or maybe its, we wont raise rates in may, it will be august or september of next year . Is that whats going on here . Ive got to tell you what, i think youre spot on. This is like watching a train wreck in slow motion. It is such a screwed up world that the retail numbers can be as bad as they are, and we talk like abigail does about the falling out of the bottom and the consumer being impacted, no wage growth and a job pool thats terrible. Yet, the market goes up because everybody says, whoa, the feds going to maintain its buying schedule for junk debt in the first place. So, screwed up. Were up 196 off march 2009 lows, so ill take it, but i hate every minute of it. Is that why i dont think this retail sales number will affect the fed at all. Theyre on autopilot and qe. This retail sales number wont affect what the fed is doing at all. Theyre not on autopilot. Theyre making it up. We should mention the markets pricing for that second rate hike did move out to december from i think the october meeting for 2015, so it had have an impact on what people think of course it did. Of course, it will affect what the fed does in 2015. For the day. Yeah, i think youre spot on absolutely. This is what traders are looking for because its more affirmation that everything is going to continue to expand. Rick, you know, i have this sneaking suspicion that what keith just said, you might ally yourself with. The markets up 190 in five or six years. I loiike it, but i also hate is its up 196 off the absolute bottom and im sure everyone in the market picked it to be the bottom, but if you look at 06 and 07, the numbers are a bit smaller and the nasdaq in 2000, the numbers are negative. But having said that, yes it makes absolute sense. Were down testing the low yield close from last thursday, which could give us a new yield close of the lows going back to june under 2. 41 with the flat retail sales adjusted for inflation. Its a concave pancake at best. And i think, yes, zero Interest Rate policy is under scrutiny. And i always laugh when i hear people say, what does it do, change it two or three months . In the current marketplace, the bulls out there are just loving an extra two or three months where they dont have to put on their thinking cap and they just think of janet yellen and these softerthanexpected numbers. But on this one, especially when adjusted to inflation and i urge everybody to go to st. Louiss Federal Reserve website and play with fred, because you can see exactly how weak retail sales is, and we all ought to be looking at these numbers adjusted for inflation, because thats where you get the true message. Absolutely, rick. Jack bouroudjian, what say you . You know what, i love hearing this, because it tells me that there is still so Much Negative sentiment out there. You know, everyones talking about how sentiments changing and its all bullish. And you know, ricky, i could not disagree with you more, all right . The numbers are the numbers, jack. Not retail sales the numbers that came out by Corporate America tell you why the market is trading where its trading. Its not because of janet yellen. Because everyones not at macys [ everyone talking at once ] making money. Cheap debt if we saw speculation in the market the way youre saying hey, give me a trillion dollars, ill give you a good time, too. We would see a multiple of 20 or 25 on this market and that would take it up to 25 or 3,000 in the s p. Were nowhere near that. This market now [ everyone talking at once ] it is still recovering. There is nothing about this market right now that tells me that it is jack on the err of the fed. Not when youre seeing Corporate America doing what its doing the geopolitics doesnt bug you at all this week when geopolitics have been a problem for weather not bugging you today . You know what, youve had geopolitics as a problem for the last 25 years and this markets gone up when reagan was president jack, jack a multiple on it i think we have to take into account the junk bond market. Last week, or the week ending august 6, reporthigh outflows, 7. 1 trillion from junk bond funds, much larger than last year and 2013. Its summer. Its not Interest Rate risk, its credit rate risk in this there you go, abigail, absolutely. Abigail is right. The last time yes. That the junk bonds sold off, the market then followed. I think well see it again. It is absolutely true. Its an early tell. Plus, the commodity complex. We have the crb index down 7 from its recent highs, crude oil down as much as 10 . Theyre not perfectly correlated, but theres still enough of a connection to believe that the stock markets going to fall abby, these are cyclical markets. When youre talking about is exactly what happens its going to catch up with the commodity market its exactly what happens every summer bp. Wait, what about 2011, jack . In may 2011, the commodity complex fell apart. Two months later, the equity markets corrected by 20 . Technically, were setting up for something very similar. So, this may not be just another summer. Abby, i love you, but were not even close to that were not close to that right now why even bring it up, unless you start to were not even there were 10 down on commodities. Its suggesting that the commodity complex is going to continue to correct. I think stocks follow. Plus, when you talk about junk bonds abby, were going to be sitting here in one month at september expiration talking about new highs in these markets. Oh, i dont know about that, jack. There is an underlying bid in equities that just will not go away. I dont know. That is a fact. Small cap and technology looks pretty weak. I think that we could be is the highyield selloff still happening . You guys sort that out. Rick and i will go deal with the debt. The new numbers, kelly, come out tomorrow, thursday. The lipper numbers. Well have to see what those outflows look like. All right, let me ask david a question here, in light of your point of view. Give me one idea that will help me make money in the market you foresee or avoid losing it. I think that right now, what i mentioned earlier, emerging markets or frontier markets. Frontier markets have had a good run this year. Emerging markets are undervalued, trading at lower pe than a lot of the developed nations right now, and thats an opportunity. Also, there continues to be an opportunity and more defensive preferred securities. With Interest Rates still low, weve had a good interest in that sector and we think that continues to do well. So, theres a couple areas where you can have a good total return and diversify away from just domestic equities. Jack may be right, and were even higher a month from now, but weve gone 34 months without a meaningful correction. Investors would be prudent to look and be a little more cautious, a little bit more defensive, not short the market, not go to cash, but look at how you get some noncorrelated positions in your portfolio along with those u. S. Long positions. A little bit of Downside Protection and a correction we know is coming. Im sorry we had to work so hard to get you out of your shells, but it was fun. Thanks, everybody. 15 minutes to go. The Dow Jones Industrial average adding about 81 points, a decent rally. At the highs, we were up triple digits today. The s p holding at about 11, the nasdaq up 40, tyler. And the tech bellwether and dow component Cisco Systems has profits out after the close. We will tell you the numbers to watch out for and well deliver them as they hit the street and then tell you the impact on the stock and the rest of the markets around. Dont touch that remote. Has the auto giant become too pricey after this years doubledigit percentage gains . The pros will weigh in. And up next, the head of the Exportimport Bank will speak with us about fraud allegations at the bank as he battles to keep the taxpayerfunded institution alive. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage, or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Were a force of nature, too. Over 1. 2 billion eyeballs are on us during the two weeks at wimbledon. True tennis fans want to know whats happening. They dont want to just see whats happening, they want to know and understand why its happening. Anybody can just put data up, but we want to get a reaction, make it far more interactive. We rely on the cloud to provide that immersive digital capability. Give fans more then just the game with the ibm cloud. The ibm cloud is the cloud for business. Youve been working like a dog if yall year. E me, but you dont need to camp out til labor day to reward yourself. Mattress discounters labor day sale is on now rest those tired bones on a queen size serta mattress and box spring set. Right now, theyre just 397. Get 48 months interestfree financing on the entire tempurpedic cloud collection. Not to labor the point, but this sale wont last long. Mattress discounters a very nice green day for the industrials, for the nasdaq composite and the s p 500, all of them moving markedly higher and have been most of the day. A little off the highs, but nevertheless, a positive day for equities. The battle over the Exportimport Bank continues on. For the past 80 years, the bank has helped American Companies sell American Products overseas, its main function, looking to insure companies against losses if they are stiffed by a foreign customer. At the end of september, the Exportimport Banks charter is up if congress does not choose to reauthorize it. The bank will seize operations. Right now congress is on break until september. With us now is chairman and president of the Exportimport Bank, the man at the center of it all, fred hochberg. Welcome. Thank you. Thanks for having me on the show. You seem confident. Youre out there doing the media. Youre going, you know, congress is on break. Do you feel like you have weathered the storm and that you will get reauthorized . You know, we support a lot of jobs in this country, 205,000 last year, to no cost to the taxpayer. Most of our customers, 90 are Small Businesses. So, im confident. Weve been reauthorized over and over again over the last 80 years. We have a tough sell right now, but im confident well move forward. There are concerns about some of the goings on at the bank, some employees who have left under questionable circumstances. The word thats tossed around is corruption. How do you answer those allegations . Well, i believe we actually have a very good culture of ethics. I actually recently met with every employee at the bank to underscore that. Weve got ethics training. And what happened in these four individuals that you mentioned, all those cases came to light because other employees saw something that didnt look right, that was suspicious, and brought it to the ethics officials and our inspector general. So, i actually feel very good about our employees, very good about that culture. And the fact is, i ran a company, every company, every corporation, nonprofits. Youre always going to have some people who sort of go outside of the law and try to do things that are incorrect. And the question is having a culture and catching them and then correcting them. And thats an open question. Look, one of your employees just pled the fifth on capitol hill. Representative jordan says there are 40 fraud cases being pursued at the exim bank. And again, you know, private sectors one thing. Were talking, again, about a taxpayerfunded institution, one which you happen to spend a lot of money now in the media and marketing blitz to convince people they should stick around. I see it very differently. First of all, those 40 cases are companies trying to defraud the u. S. Taxpayer. In every agency, whether its medicare fraud, Health Insurance fraud, there are companies and individuals trying to defraud. Thats what those 40 caseare. Were talking about four individuals, first time at the bank weve had four individuals under investigation. So, thats really not the case. You know, every august i get out of washington. Frankly, who wouldnt want to get out of washington . I travel the country meeting with Small Business exporters. Im talking to you today from st. Louis. I got our other directors, we are always meeting with Small Businesses, encouraging people to use our services, export more, create more jobs. Fred, if i may, i want to just play you some of the qualms that Richard Anderson, the ceo of delta, raised when we interviewed him in atlanta last week. Take a quick listen. Our objection to the Exportimport Bank is a very narrow objection. We support the Exportimport Bank for small industry, we support it for caterpillar, we support it for all the other industries. We have one narrow issue, which is, when our government finances very wealthy, sovereignowned airlines that have access to private markets, and they take jobs from people in the u. S. Thats our objection. Thats the concern from the ceo of delta, fred. What do you say to that . Well, we support u. S. Companies when theyre selling overseas and they need financing because its either not available in the private sector, or to meet the competition. What Richard Anderson doesnt acknowledge is we are supporting boeing aircraft, because they compete head to head with airbus. If we dont support boeing, people are just going to buy airbus planes. So, we make sure that there is a level playing field, that foreign carriers can choose between airbus and boeing, and financing is not the issue. Thats what we want to make sure. We dont want to lose jobs in everett, washington, and the 15,000 suppliers around this country to jobs going to laos, france, and hamburg, germany. Mr. Hochberg, i dont remember a time when the Exportimport Bank was called controversial. I wonder why you think it has become so and whether were delighted that youre here now, but whether you regret getting in this position where youre having to fight in the media to restore the charter and whether you wish you had fought harder sooner . Let me say this, one thing about this media fight is we are educating more consumers, more Small Business owners about exporting and how they can increase their sales and add to their Employee Base by doing