The First Quarter of the next year but this time may be different and well talk about why coming up here. Plus retail reality check. Jcpenney, the latest Department Store stock for a pop this earnings season and the government retail numbers less than expected. Well dig deeper into what is going on with the u. S. Consumer right now. So herky jerky. First, there were major problems for delta as we know this week with thousands of Flights Canceled. Now, another airline experiencing turbulence. Literally this time. 24 passengers needed medical treatment because of it. We have details and the fallout for the Airline Industry coming up. That is a nightmare story. Hillary clinton releasing her 2015 tax returns today. Trying to pressure donald trump to release his tax documents, but will it make a difference . Thats coming up, as well. A lot to get to. Lets start with the market moves today. Stocks pulling back just a bit of yesterdays record close. Bob pisani behind us looking at the financials which missed out on the record rally. Bertha coombs with the tech sector and seema mody looks at the last time way back at the end of the 20th century. Bob, lets start with you. Important thing here, bill, s p 500 historic highs and the banks cant get momentum going. Look at this week whats going on. All the regional banks, the s p up factionally for the week and doing nothing. Huntington beach banks for example, fifth third. All down about 3 so far this week. If you look at the bank index, theres the kbe, starting promisingly. The bank stocks started positive. But you had a flat yield curve, modest loan growth. Look what happened to the banks overall. No yield Curve Movement there. Modest loan growth and better opportunities in other sectors. Thats what was going on with the banks overall. So focus on right now. The sectors that matter right now, tech and energy are the leadership groups, utilities, telecom, consumer staples, the laggards and banks not doing anything. Not lagging but not showing any leadership at all. And this is a problem for a long time, guys. Look what the longterm bank index versus s p 500, thats the white line, the bank stocks as a group still half the value that they had ten years ago. That is relative underperformance. Guys, back to you. That is some chart, bob. Thank you. The tech sector, meanwhile, has really taken off lately helping lead the rally. Bertha coombs at the nasdaq looking at that angle. Sara, investors like to see different classes of stocks confirming record moves and taken the qqqs, those are the biggest cap stocks here at the nasdaq, and extra year to catch up with the come positive it. Most recent move is led by big cap tech like apple. Providing some of the biggest point impact, gaining 13 just since the start of this quarter. Brexit . What brexit . Chips helped power this rally. Theyre up about 12. 5 quarter to date. Led by invidia today at an alltime high following blowout earnings driven by chips for gaming. Its up about 5. 5 . But unlike last year when the composite moving to new highs, facebook, amazon, google, theyre providing a heavy lift but its a much broader rally in tech. Some of the big rotation that were seeing into the names has gone into oldline tech names of microsoft and intel. Which have seen nice gains. But they also paid dividends. And thats something that we didnt see the last time around at these levels with tech stocks. It is a much different rally and a much different valuation. Especially when you add in those dividends, bill. Thank you. In fact, the last time the dow, s p and nasdaq closed at new highs on the same day december of 1999. Shortly before the dotcom bust. Seema mody looks at whether history repeats itself. It is not a common occurrence to see the dow, s p and nasdaq hit alltime highs at the same time and investors are trying to analyze what this market trifecta means for the direction of stocks going forward. According to data, since 1986, this market trifecta happened 132 times. And usually its a mixed signal for the market with the naz democracy and the dow typically moving higher and the s p 500 moves lower. The last time, of course, this happened was 1999. And one month after this milestone was hit, the s p 500 fell 5 . Thats leading many to compare and contrast 1999 to 2016. One factor to consider is valuations. Check out the price to earnings ratio of the s p 500. Trading at 29 times in present day. But back in 1999, excuse me, 29 times earnings in 1999. Fast forward to 2016 at 18. 6 times. Nasdaq 100 trading at a chopping 72 times back in 1999. Here in present day at 21 times. Yes, the s p and nasdaq trading higher than historical averages but nowhere near what we saw in 1999. Thats why this valuation experiment, of course, or the part of the story is something very important to consider as we compare and contrast. Back to you. Thats exactly what Jeremy Siegel told us on the program yesterday. Nowhere near and why he thinks theres room to go higher. Interest rates back then around 5 to 6 . 2016, the low rate environment for another catalyst why investors allocating money into the stock market. Thank you very much. Lets kick it around a little bit. The Closing Bell Exchange today, sean ohara, keith bliss at post nine and scott nations joins us today from chicago. Keith, we established that the market is trading like its 1999. Is there any reason to believe it wont just keep creeping ever higher and higher . What could stop this run here do you think . Well, you are right, bill. The term thats gotten into the collective lexicon down here on the floor and also on wall street thats crept back in is called a meltup. I dont necessarily agree with that. Thats generally sharp moves higher and money redeployed and a grind higher. To the point and question, i think it will grind higher. Sure, theres compare and contrast of 1999 to august 11, 2016. The markets are totally different and what got us to that point in 99 and early 2000 is people were just pouring money blindly in to companies that werent making any munl at this point in time. Didnt have a product. I was working in a large Nasdaq Market maker at that time and Companies Public that didnt have a product yet. I remember. Thats a crazy time and the Market Dynamics and fundamentals, technicals inside of each of the charts are very different at this point in time. We have the markets neutral, and the way that theyre positioned particularly the s p 500 and the nasdaq composite i do believe that this market can continue to grind higher here. Still, sean, one of the features back then was that the stock market didnt necessarily reflect the fundamentals and there are questions right now about whether stock market valuations reflect the real economy, matches up with reality. What do you say to that . Well, you know, just to finish the last point, you know, in the 1999, a big sector of the market was trading at a huge multiple and drove it up to 29 times so what youre seeing right now is a real disconnect of reality looking at earnings and Earnings Growth and gdp. Theres a huge separation of what would be traditional valuations. So its a little bit disconcerting. The market is working on like an inverse news cycle. The worse the news is, the more the stock market goes up and people continue to believe theres Global Central Bank intervention and quantitative easing and continues to drive stocks higher and higher. Theres a particular sector today or a kind of tock that really concerns us because its valuations are stretched versus the market and traditional dividend paying stocks and if you look at funds or etfs trading 22 to 25 times. Thats a crowded trade, yeah. But you own p g, dont you . So thats a great leeway to talk about what we do. We have a global dividend strategy. If im an investor looking for dividends today, i include u. S. Stocks and look around the world to buy a basket of highquality names with dividends and dont trade at the big valuations. We trade at 15 times earnings and 4. 2 dividend. I would rather buy at a discount to market and higher dividend flow and if things didnt continue to grind up as the previous guest said. Nothing gets passed sara. We talked about how Interest Rates are lower than they were in 1999. Do you think the stock market would be as high as it is today if rates werent as low as they were today . Oh, certainly not. I mean, we look at the 10year yield around 1. 5 and makes it easy to run out and buy the dividend paying stocks that sean doesnt like that much. Look at the pe for the 10year treasury. 1. 5 . The pe is huge. Well, you say that youre not the biggest fan of some of these names, i actually think compared it to the 10year at 2. 2 or 2. 3 , the yield on the s p is actually in really good shape. I think if theres anything confounding today its the performance of the retailers given that retail sales were horrible this morning in the entire sector doing really well today led by nordstrom. But we have the entire Retail Sector in the form of the etf higher, walmart higher, amazon higher. So i think thats why its confounding. It is august. Were supposed to be confounded right now. To that point, keith, it does feel like whatever your opinion of whether the bull market continues and the records made, the defining moment is low Interest Rate environment and we have seen stubbornly persist. Yeah. Lets take a step back from what we think real valuations or good valuations should be and look at the fundamentals and realities of the world. You have Pension Funds globally struggling to meet the future liabilities and they have to get some yield out of their investments so bertha mentioning before we came on where the runups have come in traditional tech stock stocks of microsoft and intel. Pension funds run into them to rally and they have a good dividend yield and they need to get yield in that. Its really no more complicated than that in this current market here in august. Investors are chasing yield globally and right now the best place to get that is u. S. Equity market. A simple market, complex investors. Yeah. Absolutely. And theres no alternative. How many times have we heard that . Thank you, t. I. N. A. We are heading into the last hour of trade with the last hour. The dow down 49 points. Pulling back from the yesterdays alltime high and the s p down 3. 5. Nasdaq goes positive. That disappointing retail sales number has raised some new flags about the economy. Up next, well tell you which part of the Retail Industry are working. And whether investors should be worried about the consumer here. Plus, with index funds continuing to outperform actively managed funds, is the age of the stock picker officially over . Well talk about that still to come on the closing bell. Can an established bank move like a startup . Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. Perfect driving record. Until one of you clips a food truck. Then your rates go through the roof. Perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you twentyfour seven. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov stocks are pulling back from the record closing highs yesterday. But just barely. A selloff for the dow right now. S p 500 off less than. 2 . The nasdaq actually remaining positive. Energy and staples are outperforming in the s p. But the best performing stock right now is nordstrom. This after the companys earnings beat wall street estimates. Thanks to a smaller than expected decline in samestore sales continuing a pattern, bill. Yeah. Yesterday we talked about the possible resurgence of retail. Is that story line holding today . Courtney reagan wraps it up and Steve Liesman with the new data of this morning. Lets start with courtney. Jcpenney is getting there and still a long way to go. The retailer posting a loss and both smaller than expected and a fraction of last years loss. Sales a little light and comparable sales still positive. Remember, its rebuilding back those big plunges we saw under the former ceos failed transformation and then the reversal and reiterating fullyear guidance. They like the strength driven by regular priced selling at jcpenney. Margins, though, only improving 10 basis points. Updates to the center core where the accessories are sold and home of the appliance rollout strong points and each expected to further take hold in the second half of the year. If i play teacher and give a report card for a minute, yc penny, ralph lauren, macys, kohls, nordstrom, rewarded. Coach did beat on profit and shares are down for the week. Kors and wayfair, in the back of the class for the week. Sara, back to you. Hang on. Well talk more in a minute but we want the latest data on retail sales this morning. Not painting a rosie picture of the consumer, Steve Liesman has the details and the context here. Steve . Yeah. So after spending at a solid clip in june, consumers just kind of gave the credit cards a rest in july. The governments retail sales report shows spending flat last month after the upwardly revised gain in june and the concern of economists is whether this was just a pause or if consumers have been single handedly holding up the economy if they might be ending their spending ways. A lot of month to month volatility here in the data and spending stays flat in august, well, thes concerns the economy might not be growing or at all or a potential recession on the edge here. Sales declined in sporting goods, Department Stores and grocery stores. Gasoline stations fell as sharp as 2. 7 . That was mostly the result of price declines. Some economists wondered if part came from overall lower prices in some industries. Auto sales did surge 1. 1 and online retailers saw sales increases. Maybe thats an effect of amazons prime day and Internet Sales shot up. Whatever the reason, doubts about the consumer, thats another reason for the fed to go cautious on rates. Courtney, sara . Thanks, steve. Or anybody. All of us. Take it is it as simple as, courtney, online retailers picking up more and more market share . That is certainly part of it. Remember, you have macys operating stores and a website. And macys is the Third Largest retailer in the categories in which it sells. So there is some shift to the online channel. Remember, also, though for Department Stores, expectations were really low. First quarter was really, really crummy and been pretty bad since last august. And so, to just beat those low expectations thats how you got the stock pops. We are looking year over year, the retail sales data looking month to month, as well. Steve, i was just wontd wond how youre making sense of todays report and last gdp number, a bright spot is 4. 2 rise in Consumer Spending. Without the consumer we would have nothing, sara. Take a look at the fundamentals of consumers, two jobs reports north of 200,000. We have had better paychecks out there. We have relatively quiet inflation. The fundamentals are there for the consumer to spend and i think, you know, courtney may have something to say about this but the idea of Terry Lundgren and spending but not at macys or where its captured. Maybe buying more services. Taking more trips. Doing things that arent necessarily captured in the standard or traditional retail sales places. Yeah. I think that is really true. What terry had said is thats the pattern for sometime. Consumers buying cars and making Home Improvements but how many cars do you need is what he said. How much can you improve the house in a short period of time . Maybe it is his turn, a turn for retailers to get some more of that now. Ask Bill Griffeth how many golf clubs he needs. Thats the thing. Is this a demographic play . Are the boomers, we were the shop until you drop generation. Maybe we have shopped ourselves out and the millennials im just speaking from experience, theyre not exactly big shoppers themselves. Are we seeing that kind of a play, play out here, do you think . I think its important questions that retailers are trying to figure out. Structural or cyclical . Whats the reason for the good this quarter and what was the reason for the bad last quarter . Is this a new positive trend or is this just because it was really, really hot in lots of parts of the country and needed new shorts . We laugh about weather that can really make a difference. I know. I was going to say, okay, who had weather mentioned at 3 22 . We finally got around to the weather. Eventually they do. Thanks, guys. Appreciate it. Have a good vacation, bud. Thanks. All right. Less than 40 minutes to go here before the closing bell. And lets show you where we are on stocks. Selling off to the tune of about 54 points on the dow. S p down less than. 2 here. So we are pulling back from the record highs. Well see if the nasdaq can stay positive for the session and for the week because it would be seven in a row if it does close higher for the week. Many people on twitter commenting on how im wearing a tie to match her dress today. Isnt it possible, though, that she put that dress on to match my tie . No. Because i got dressed at 3 30 this morning. Okay. When did you get dressed . We move on. A rough week for delta. Not going any smoother. After a flight had to turn around because its door may have been open on a delta jet and not the only carrier with turbulence this week. That story next. L