Full Team Coverage all over the conference calls, and well bring you the headlines as they emerge and thats where we begin tonight. Starbucks tumbling on an earnings miss. Chipotle volatile after hours on another mess, and visa holding steady. Now, weve had results this week, of course, from big tech, banks and now consumer stocks. Have the earnings or do the earnings justify where stocks now trade . Thats a great question, simon. I havent asked you yet. Guy, lets start with you. Well, were you sort of looking at me, i apologize. False start, false sglarlt can we try it again are. Just start from the beginning of the show. Appreciate that, simon. Thanks for asking. Listen, the earnings once again have been a mixed bag. You mentioned chipotle. I can give you a microsoft on the other side which was outstanding. You mentioned ibm, there was Goldman Sachs that had a great quarter. Earnings absolutely do matter. The question is does the economic environment we find ourselves in justify what i believe is a 19 forward multiple on the s p . Some would argue on different metrics its much higher. Its closer to 25, but thats what you have i think thats what you have to sort of wrap your head around. I would submit the answer is no. Based on Interest Rates can go down. Others would say the exact onit. Again, this is the same ageold conversation we have on this show. How can you say this isnt fundamentals . Its in fact fundamentals when Interest Rates are zero, when theres zero cost to capital. Companies should be trading at a much higher multiple, earnings yield, et cetera, et cetera. The problem for starbucks it comes down company by company. Starbucks around 32, 33 times their current numbers, maybe 28, 27 times next year. The bar is very, very high for a company that i own, by the way. Do i think the china story is not what its about. Its about u. S. Comps and the bar is very difficult and the valuation is very difficult. Karen . We talk about this a lot, kim, particularly about the idea that its not a market of stocks, it is it is a market of stocks, not a stock market. Great examples of things that are good. A nim that i like and talk about a lot, united rental. Its the largest Equipment Rental company in the world, and they seem to have really hit an Inflection Point in the last quarter. Thats really good portending growth in the economy. But the broader point is what is the tenor of the earnings that were now sneeg do they justify where we are, do you think . I dont think it matters. You dont think it matters . Because it goes back to Interest Rates. As long as every central bank is willing to be the backstop, who cares about the earnings . The markets hasnt cared about earnings. I mean, for the last 18 months weve gone sideways, a great market if youre a long, short type of Hedge Fund Manager like karen and tim, you can get in there and pick individual stocks. Thats this type of market. I dont think to the overall market the earnings really matter so much. I mean, people are buying stocks like at t because of the yield. They are not buying it because of the earnings. As long as they are good enough and they dont think they will lose the yield i think people continue to stay in the names. A lot of people are buying stocks and not for yields. A lot of sectors where you do have Earnings Growth and a lot of secretary thoors are interesting Like Health Care and even phrma and theres a place where markets were at alltime highs. This is about equities, all know about the earnings recession and the renat, as i said last night, its not a trough. Earnings are set to go up higher especially when we look at year over year and the bar is very low. Stocks stay near the highs unless we get an event. Why is the barlow . Think where weve come from over the last six, seven quarters. Everybody knows corporations have had difficulties, people know about labor costs and struggles with the dollar. The reasons why companies shouldnt be performing in this environment are out there and, therefore, a lot of companies have been extremely cautious . Why would it make sense for their guidance to be, where they want . Sglrns there is this, arguments that the Interest Rates will come and they may come slightly sooner than people think. Today mario draghi at the ecb was not as dovish as he usually is on brexit which caught a lot of people by surprise. Actions speak louder than words. Our fed has been fraying to play the game. Months ago they were talking about several rate hikes this year. Tim will disagree and price is truth and the bond market came back real strongly today after selling off earlier. Global rates to me germany on july 13, for the first time in their history, issued tenyear government bonds with a negative yield. I dont know what that means but i cant believe its in a constructive thing. Do you really believe Interest Rates around the world are at zero or equate to the Global Economy and where its at . I thought i did, and i still think i do, but maybe ive been totally missing it all along. Like i thought Interest Rates globally, continuing to contract meant that we have this deflationary pressures globally and a global slowdown. Maybe ive missed the boat entirely. I dont know. Thats the thing. Thats what ive been struggling with for quite some time. B. K. . To me, Interest Rates around the world, especially when they are negative, youre looking at a bubble, and this is the black swan. We can talk about earnings all we want but a rising Interest Rate, a rising Interest Rate environment is the black swan for equities. Thats going to be what takes this whole thing apart. You talk about i mean, unless we have some kind of massive growth that we really have to you know, we can really outpace. Dont we need growth to get the rising Interest Rates . Not at all. You think some exogenous company or what . You can get a stagflationary event. Right, everybody is excited about oil going up and if oil goes up and we still have 3 Global Growth thats not going to be good. You think rates are going lower . I think rates are going lower. Which means equities are going higher. Which seems that way. So we all agree. Lets move on from wall street to washington. Tonight is the big night for donald trump, of course. He will formally accept his partys nomination for president. What implication, if any, will it have for the stock market . Former tennessee representative harold ford is a convention veteran giving the keynote address in 2000 and managing director at Morgan Stanley and, of course, an nbc news analyst. I think maybe for many people the burning question would be given where we are why Hillary Clinton isnt doing bert at the moment in the polls . Simon, good to be with you and thanks for the kind words. I think that she is at a point where most candidates are this stage of the race. Remember, this is a country this is divided. Even when you look at races that president obama won four and eight years ago, won by three, four, five points in the National Polling and larger numbers when you look at the statebystate polling. I give credit to the republicans in this regard. They have certainly had an unusual convention. For those who have complained in the past that political conventions are stayed, political, scripted, the Republican Convention has been very different than that. Tonight is a big night for donald trump because of all of the mishaps and missteps and accusations of plagiarism at this convention and most remarkable thing ive ever seen at the convention, what ted cruz did last night, if donald trump and his daughter have an outstanding evenings, the convention will be remembered for that, and then well get a roub of polling to see what has happened and next week the democrats go. Secretary clinton is going to pick her running mate here in the next 24 hours, it is said. She will pick a good one and she will have a week to put on not only a show but give the country an opportunity to meet her Vice President and hear substantively take the country and after next week the polling takes on a new level of seriousness and another layer of credibility when we read them. Isnt the game here for trump really all about the swing states . Yes, hes got to look at the national picture. Yes, hill little come with her own vp choice, but essentially if he can hone a message to other people that hits home in the rustbelt states and the swing states of this country, he can basically rip the carpet from under your party. Isnt that the big danger here and what he may succeed in extremely well . Well, i think thats definitely his plan and the question is whether or not hell be able to execute that plan. I think a couple of factors you have to look. A i think the country always vote for steady, smart, reliable hands to lead the country. Secretary clinton would obviously make history being the first woman elected president. Demographics are also something president ial candidates look to in the rustbelt states, the rise of the importance of female voters and africanamerican voters. And hispanic voters. Secretary clinton maintains a lead. If she maintains a demographic lead in the result belt states, michigan, ohio, pennsylvania and illinois, i think thats a tall hurdle for mr. Trump to overcome. However, he did pick a midwestern governor. I thought governor pence gave a very solid address last night. Looked like an adult and a smart steady hand himself, but the question is does the country want donald trump, some of the outlandish comments . One of the more outlandish ones is when he said yesterday to the New York Times he would view the u. S. s participation and willingness to defend the nato allies and would predicate it on whether they were supportive of us. Its a dangerous pox to take and could have an impact on markets around the globe, not only markets but certainly the way our allies view our partners. And that we could have a trade war and yet the markets trade at record highs. How do you believe that . Betting markets believe secretary clinton will prevail and if mr. Trump is successful youll have a Republican Congress that could block some of the things he may want to do and mr. Trump could change his mind. He certainly has not been afraid of changing his mind over the course of this campaign, even over the course of his career so i think the markets are probably betting on a secretary clinton victory which i think im biased here which i think would be good for markets globally. Good to see you. Thanks very much for joining us. Harold ford joining us, harold ford jr. As we await, of course, tonights big night for donald trump at the convention. Lets trade t. Tim . I just dont think we can trade the market based pont elections right now. I dont think that the market is doing better because trump has done better in the polls. I dont think that anything regarding the momentum of the last six to eight weeks has anything to do with it. I think the elections in europe have had a lot more to do with our market than our own elections and i dont think the market is going to do anything in terms of addressing how traders are going to adjust their books until two weeks before this election. Yeah, i mean, brexit taught us anything, we know that we cant rely on polls or rely on the betting markets so its virtually impossible to try to make a longterm investment decision, even a longer term trading decision on the polls. Its so far away from november. I mean, anything can happen in that period of time. I totally agree, but the question is do you then not invest which i would say no. I would say you go ahead with whatever your general investment philosophy is. One cant possibly know, even if i were to know for sure who won, i dont know what the market would do. I think the market does suggest dwsh the market is saying that secretary clinton is going to win in november. I think if the market thought donald trump had more than the chance that he has now, i dont think wed be trading where we are . Why, why . I think the market would be scared if she wins buy the rumor. Status quo i think at this point in the cycle is bullish for market. Do you think this election is about social or economic issues, and maybe that wont determine how the market performs here, but but i think as we look at what the economy is struggling, from im not sure ive heard anything from any candidate thats the panacea. There is no panacea by the way, and thats probably would markets shouldnt be reacting. Be sure to tune into our special report live from the Republican National convention tonight at 10 00 eastern. That, of course, is when donald trump is due to speak. As we head to the break, heres a look at chipotle, lower after its earnings miss that. Call now under way. Will the c suites speak on the e. Coli outlook and well ask a former Vice President of the country dan quayle for his take on the republican nominee donald trump. Hes called for the gop to unite around their candidate. What might he say tonight before trumps rnc speech . And later its the rally that just wont quit, but whats really driving the move higher . Well have a special report from none other than our own dom chu. Thats ahead on fast money. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Foand millions moremericans lwho feel its effects. S, lets walk together to make an even bigger impact and end alzheimers for good. Find your walk near you at alz. Org walk. Your Business NeedsBetter Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Welcome back to fast money. Straight to our big move of the day. Take a look at the gold miners rally gdx, surging, as you can see, over 3 . All. Big names within the space seeing nice gains today, b. K. It really started with the gold market and the ecb meeting this morning. Mario draghi left the door open a little bit for september, easing gold market and the euro rallied into it and fell and gold and the dollar are actually positively correlated. That means they are trading together right now. In my view gold has taken on this characteristic as the hedge against central banks. Hold on. Didnt gold rally today because in fact its been trading in the opposite of the dollar. I mean, the dollar to you camp, you dollar people, youve actually had a pretty nice run and, in fact, the dollar has been stronger on a host of reasons but maybe because it was oversold. Gold sold off in lock step. Today if you watch the euro and gold and traded almost inverse. As son as the euro started the drop and the dollar started to rise and to my view has been the characteristic of gold this year. Do you think that strong dollar will help the gold trade . Yes. See, i totally think its the opposite. Do you want to intervene here . It makes sense because your argument gold is also going to be the hedge against the world blowing up. Dollar and gold are safe haven assets, in my view. The euro was down and the dollar was down. I thought were you saying the euro was down against the dollar. So if you just look at the dollar index thats going to be 57 euro and everything else. So the euro is down stligtly, but if you look at the intraday moves, as son as draghi basically said were not doing anything now euro rallied, dollar fell and then he kind of opened the door to september and thats when everything started to move the opposite direction. Again, think that if you look if the boj and ecb surprised people by not saying more dovish things and i think i get back, to again, fundamentals say, current accounts, surpluses in japan and europe more than strengthen the currencies and keep those things in line against the dollar. Listen, when japan went negative Interest Rate policy many months ago, we talked about gold back then, look what the move has been since. Lets just call it january. In a name like newmont mining, up 3 , why . Not only because of the price of gold, well get a chance to talk about it. Do the gold miners work . Does gold still work. Despite the fact that the dollar is going to real, im in b. Conversation,s cam on this one. Gold is the next currency and goes higher. Meantime, its an earnings extravaganza on fast. As we head to the break a look at other movers, chipotle and starbucks moving lower and visa flat. Im simon hobbs. Youre watching cnbc, first in business worldwide. Meantime, here what sells coming up on fast. Ladies and gentlemen, this man could be your president. I would look in that fat ugly face of hers and say, rosie, youre fired. So does former Vice President dan quayle support him for president . Hell reveal in an upcoming interview. If you thought that was strange, wait until you hear about the stocks that are fueling the rally. Well give you the names when fast money returns. Your Insurance Company wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. 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