Health of retail looks like. Tough to get handle on retail these days. So diverse. Plus after a recent rash of airline glitches, there are new calls from congress for airlines to overhaul their i. T. Systems. We will talk to that man there, senator Richard Blumenthal, one of those lawmakers behind the initiative. He and senator marky from massachusetts sent a letter today to those airlines seeking answers to the latest glitches here. And reporting earnings after closing today, tech giant getting toward layoff 14,000 employees, nearly 20 of its work force. Shares down about 1 on the news with those earnings coming up. Over that over the next couple of hours. Lets get to fed minutes and markets reaction in a minute. First a closer look at todays earnings mess in retail. Courtney reagan has the low down for us. Plus some recap of the special guests you had last hour. Courtney . Hi, bill. Remember last week we talked about retail resurgence, but i said, whoa, not so fast . Today targets traffic is the lowest its seen in a year and half. Comp sales hit pretty hard. Target posting first comp decline in eight quarters. Now earnings lead by a wide margin but thats largely because of cost cuts so target went ahead and cut its comp forecast for both the Third Quarter and Fourth Quarter and lowered its earn willings range for the full year. Now transition to cbs with the pharmacy as part of the traffic disruption because they have to reenroll with the new pharmacy. That is a bit of an issue. Electronics is very weak. Down double digits. Target saying apple products are responsible for about a third of that decline. Perhaps target is a little overindexed to apple. But thats a conversation for another day. Food deceleration was a bit of a problem. Remember grocery is an area where target is trying to ramp up efforts. But target says it will have to revisit that plan in the second half of the year. Not a lot of details on what that exactly means. Targets new kids line was injected very well. But only Just Launched in july. Here at jc penney analyst meeting, the company laid outity threeyear financial plan. Although i think that the market is having a little bit of trouble believing that it can make it happen. Comp sales between 3 and 4 by the year 2019 seem a little bit hard to believe at least for the market right now. Jc penney shares down about 3. 69 . Big trouble again is traffic. Can the traffic get there for jc penney to hit those comps . I sat down exclusively with marvin elson after he spoke to analyst and here is what he said about jc penneys ability to meet those marks. We take the whole value message. Its really important to our customer. We struggled years ago understanding who our customer was, what she wanted and how we could serve her and we think that this leads us in a much better, clear direction. Our stock is up for the year and we think we are headed in the right direction. Appliances are a big part of jc penney and marvin ellisons plan Going Forward web said the areas in the store where the appliance shop exists productivity is ten times what it was with the old merchandise in that location. But of course the big question is, how many refrigerators do you really need . When that shopper comes in, many of which are new shoppers to buy a refrigerator, can you also get them to come back to buy jewelry, shoes and makeup at sephora. Thanks. Maybe that New Washington machine shopper is coming from somewhere. They have to. Isnt the problem just as macys highlighted last week, we are overretailed. There has to be more cut backs, dont i think, in supply and retailers continue to grow here. Isnt that what is going on . Well, whats so interesting about that is we asked marvin l ellison directly. When that happens in malls where you exist, what does that mean for you . And ellison says that is a positive. They look at store portfolio. They only are closing about seven stores right now so ellison thinks he picks up on some of that as well as from the sears traffic, especially with the new appliances. He is right or wrong . Thats for the market to decide. But right now thats where ellisons stance is on the stores. All right, courtney. Thanks very much. Courtney reagan joining us today. Fun fact, by the way. First thing i ever, ever bought online. Retail more than 20 years ago was from jc penney. You remember that well . I bought dishes. It was a big deal. We bought something, and it showed up at our doorstep. What a concept. Now to the fed minutes and knee jerk reaction where the dow is up five point. It was down double digits. Now joining us John Ka Nelly from lpl financial. Steven gillford from Stewart Frank el. And cnbcs very own Rick Santelli checks in from chicago. Sarge, i mean, look, we dont learn a whole lot new from the fed minutes but markets seem to take a little comfort from it here. The markets coming back into positive territory for the most part. Yeah. I mean, they bought utilities and the odds of a rate increase actually dicreasing from september to 26 to 18 this afternoon. And for this year say december from 53 to 45 this afternoon. So maybe James Bullard hanging on to his dovish stance. Maybe fed minutes. But people are seeing less of a chance for september high right now than this morning. I want to go into what the Playing Field looks to me. Core retail sales. Housing starts crack the 1. 2 resistance level. Core cpi. Even the fed is posting 1. 46 head cpi Going Forward which is up. 6 from where it is now. Basically everything plays into in my opinion, the need for a rate hike sooner rather than later. I understand they take a pass in september. Now rick, the interesting thing is i guess yesterday and repeatedly over the weeks suggested that the fed wont raise rates in september because of the election that looms just beyond. Do you think thats right . I do think there is lots of politics involved in the Federal Reserve unlike the boiler plate many have. But i think if there is no election, i still think i would be hard pressed to say that i truly believe that tightening was coming. Im not sure what the fed wants to do but i know that if they look to the marketplace, if they look to the iron year, fed fund futures as validation for their actions, those markets respond to them when you think about it, it is a crazy echo chamber. It makes little sense. And i remember when i first started trading, there was a guy named paul volcker. Thats the loader. You put a large group of people in a room, they are always going to disagree. You need strong leadership. I dont see it at this fed. And you know, the last guest is right. But it is way more than that. We are still virtually at emergency rates. Its crazy. Theyve had many opportunities. Im not sure whats going on but i know one thing in the who is saying it best, meet the new boss and it is a lot different than the old boss and it is called the market. And the mark set never going to say, okay, were ready for a rate hike now. John, what do you think the mark set going to let me just preface it this way. He wants to see more positive news on the economy before they pull the trigger. Whatever that is. I mean, so what do you think the fed is waiting for . And what will happen to the market when they do finally pull that trigger, do you think . I think it is still data dependent. I dont think that changed. There is still a lot of disconnect between the fed and market. A lot less than the start of the year. If you remember at the start of the year the fed says they will do hikes. Then in march just two. So that has narrowed somewhat. What we have seen lately is a lot of disconnect within the fed itself. Todays minutes look like, you know, the family table at thanksgiving. They are all arguing with each other back and forth so i think even the fed doesnt know. We have one fed rate hike baked in this year. Very narrow path it a september hike. We are now off the path given from last week but we still think we get one in there and maybe two next year. But and i think the fed is also really overly concerned as most as ive seen in the 30 years ive been doing this, with the external situation and in particular the dollar. I think thats the key. Well, in a way the dollar keeps becoming more of a problem for them as the globalization continues and more of the Global Economy is using it. But i will go back to your tech thesis, john, as people say, all right, we are looking around in the market. You still like tech here, is that right . Yeah. Tech is our favorite sector. We got through the earning season. That looked pretty good. A lot of underspent in tech lately. Tech does provide growth and provides a little bit of yield where it doesnt back in the day. So tech is our favorite sector. We also like health care. Health care has come under already this year a lot of political pressure by think to the large extent those are overdone so health care is another, you know, another area we favor here between now and the enof the year. Sarge, where are you seeing fun flows go right now . Are we are people still inclined to want to buy the issues like those utilities and the telecoms or are they starting to dip their you know, bank of america is high on oil stocks all of a sudden. You know, i had felt that oil would be a good buy if we could get the commodity down into the mid 30s, which now is running way from that level. You wont see that. And like that last guest, john, i do like the tech sector. The one area where i still have several longs. I am trimming my profits in some areas. Getting out of some of the industrial names. But Going Forward, im going to have a lot less position so i can concentrate on exactly what im doing. Im going to be still diversified but im going to have a lot less on the plate because i think were at a point right now where if youre wrong, you could be very wrong. Sewer going to have to defend yourself. Works in investing, works in life. A lot less on that plate. Real quick before we go, keeping an eye on the dollar again here, and is that going to be part of the tell for the fed and for the markets overall . My opinion is no. Because i think the dollar and all of the investors and speculators traded off fed comments. So i really dont think it is going to be a good signal. However, i will say that when you really dont have to question what the dollar is doing because it is either super strong or super weak, then i think maybe you have reached the turning point. But i think fed fund futures, forget about it. Its a different time. A new normal. There are rules of the road. People used to be able to traders looked at all of the fundamentals and made value, educated judgments and put their money to work in fed funds. You cant do that any more. Look at a couple of ticks in fed fund and think those percentages mean something is silly. All right. Got to go. Thanks, everybody. Thanks, guys. Thank you. Got a little more than 45 minute still to go in the session here. Digesting fed minutes. Digesting some of the other developments of the day. Dow is down four point amid all that. An lot of calories to digest. The s p is a fraction lower and the nasdaq is down 8. Gaining at least 50 so far this year, plus two stock pickers talk about names that could notch fat gains going into 2017. And up next, remember deltas travel nightmare last week . Senator Richard Blumenthal says it is high time air carriers overhaul their Technology Systems to help passengers get to where they need to go. He will tell us exactly what he is looking for in just a moment. Keep it here. 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Create missed street estimates for earnings last quarter and kbaf weak guidance for the current quarter. Meanwhile, Valeant Pharmaceuticals up. Upgraded from equal rate and raising its price target from 33 and is now at 29 and change. Firm says that major risks for valeant is in the stock already and it suspect the company to successfully renegotiate. They are just overweight on very controversial name. Senators blumenthal and marky are cracking down on airlines sending letters to 13 Major Airlines including delta and southwest. This after deltas widespread computer outage resulted in thousands of Flight Cancellations and delays. The senators are asking airlines to explain outages to reimbursement policies. Senator blumenthal joins us from his home state of connecticut. Welcome, senator. Thank you very much. Great to be with us. Is the heart of this that you want people to swap on to a Different Airline to get where they are going if one of the major carriers runs into a problem . If they run into this massive melt down and travellers are to be reimbursed and rebunded, no questions asked. For given the opportunity to rebook on that airline or another airline without any limit on time or additional cost. And they will be able to do it at their convenience, not the airlines because these massive melt downs have become increasingly frequent. And they happen senator after major mergers occurred in the industry. American and us airways, northwest and delta and of course united and couldnt yent nal and we found especially with unite end continental, difficulty of merging their reservation systems. Do you think thats part of what is going on here . Just trying to get their acts together . Thats a key point. Consolidation in the industry is now produced a market power among four airlines. They control 8 will 5 of the market and they had to consolidate their systems. So they are relying on software and other parts of their system that is out moded and they have had to cobble together systems. And im asking that they invest to make the systems more resilient and reliant. Remember, delta failure resulted from a piece of equipment, switch gear malfunctioning, so that backup system failed in effect and that kind of elemental failure simply should not be occurring if they invest properly in these systems. Yeah, i guess im just wondering what the role is for the government to play here. Seems like thats in the companys interest already to do these investments so they dont have the catastrophic failures. I can see a role to force or nudge them to effectively bail one another out. Just have one say to the other, you know, were willing to take these passengers and try to get them where they need to go but that seems also like an extraordinarily complex maneuver. Hard enough to get rebooked by the same airline let alone pick from a suite of flights from all the different carriers available at an airport. So yeah, is that the idea here . Is there any cost benefit analysis that would go into, you know, any decree here . The idea that the free market should provide an incentive is absolutely right. But we dont have a really free market when four Companies Control 8 will 5 of the market and their systems have resulted from the cobbling together or integrating or failure to integrate their computers. So lets create some incentive and require them or maybe they will voluntarily agree to refund, no questions asked or rebook without limits on time and without additional charges on their own airline. Or competitors. Or a competing mode of transportation. That would make the market work more efficiently and give them incentives to do the right thing and i hope they will do the right thing. It is interesting, the conversation we have here, occurs to me the idea behind the deregulation so many years ago was to promote competition and i know the airlines themselves would cite problems they had after 9 11 and certainly after the financial crisis. That is maybe what promoted all these mergers we saw. But now we find ourselves with those four airlines that you talk about, was it a good idea to allow those mergers to happen . I mean, is that really a problem we should look into as well . Great point. The mergers probably should not have been permitted. I opposed one or more of them and i believe strongly that the industry aught to be examined. I urge the department of justice to conduct an investigation of some of the potential, emphasize potential, collusion thats occurring. The so call talk about design capacity when they come together and talk to each other. So the department of justice now is investigating and perhaps that will he energized competition. But your question is absolutely right. Should it have been permitted . Probably not. But now lets make the system work better and maybe some form of incentive required by the government in rebooking flights or refunding without questions asked is a way to give the industry that energy and em pe tus to do the right thing. They should be doing the right thing by