And welcome to power lunch. Im melissa lee. As brian pointed out, disney shares getting slammed on the revenue miss. The stock is the biggest drag on the dow shaping off about 20 points off the industrial average. Energy and real estate the best performing sectors, health care and discretionary the biggest losers. Check out the big movers here, yelp about 20 , co it coty soar. Thank you very much, melissa. Welcome, everybody, to power lunch. Im tyler mathisen. Losses at the u. S. Postal service narrowing from a year ago. The ecommerce boom package to offset firstclass mail declining revenue there. And amazon slashing Free Shipping minimum requirement to 25 from 35 for nonprime members. Earlier this year walmart rolled out free twoday shipping for orders of 35 or more. And apple supplier foxcon will begin construction of a u. S. Plant in the second half of the year. We begin today perhaps understa understandably with washington and arguably the most highly anticipated White House Press briefing of the Trump Presidency so far. A day after fbi director james comey was fired by the president , the deputy White House Press secretary, Sarah Huckabee sand eers, will take t podium and face the press. Our eamon javers will be in the room. He brings us the latest developments from the north lawn. Eamon . Reporter thats right, tyler. Last night the president fired the fbi director who is leading the inquiry into russian interference in the u. S. Election in 2016. This morning the president met here at the white house in the oval office with the foreign minister of russia, sergey lavrov. The white house did not allow cameras or reporters into the room for that meeting but the russian government has tweet ed out a photo of the two men meeting in the oval office and over at the Russian Embassy here in washington, d. C. , lavrov reported immediately there after this to hold a press conference. Here is what he was asked. Here is what he said. Translator everyone kept saying openly that everyone knows everything but giving no proof. Well, its not serious. Reporter lavrov there saying theres no proof. Its not serious. He said donald trump has publicly denied the allegatios. S i can tell you this is attracting a lot of attention here in washington and around the world. Just over my shoulder here behind me theres a crowd of several hundred protesters organized by liberal groups. They are shouting things like trader and shame and treason. Well see whether that gets any attention here at the white house. As you point out were waiting for Sarah Huckabee sanders who will be speaking to the press in about half an hours time. Shes filling in for sean spicer who they say is on Naval Reserve duty today and unavailable to brief the press today. Well see how Huckabee Sanders answers the questions swirling around the firing of the fbi director, tyler. Thank you very much, well check back with you shortly. Brian . So even if you do not care about comeys firing, heck, maybe you even agree with it, there still remains the issue whether this conflict upsets key republicans enough that they back off support for the president s agenda. Lets bring in two people who have been inside the white house, cnbc contributors larry kudlow and sara. Do you think when it comes to tax reform, Corporate Tax reform, health care, this outrange even among mccain and key republic ans will derail . Mccain support the firing. Mccain and lindsey. Even the methods of the firing . Im just going to mccains statement. Ive been up since 3 00. I apologize. There are issues. Look, i think no. This is a political matter. Its not a market mat thor. Does it become a policy matter . It at the very tips of the margins, brian, it could be. It could be. I think, frankly, paul ryans statement yesterday, the day before that everybody was pushing back health care a month or two, that the senate was going to consider health care more than people initially thought. Frankly i think thats more significant than the comey firing. My guess is the president will appoint, you know, consensus choice to be fbi director and those investigations will go on. Connect the dots between comey and, say, tax reform. Theres a lot of arguing, a lot of anger right now even on both sides. But does it end there . I think its really hard to connect the dots. The issue of comey fractures the Republican Party because its already fractured. And so this fractures it further. Is it going to make it more difficult to push ahead an agenda whether it be tax reform or health care for that matter . It could. Im not the final word. But when you say the Republican Party fracturing, i dont really see that. I dont see that happening. I think this was a shock, surprise. I think the timing was a big surprise obviously. Almost everybody thinks he should have been fired last winter. So i get that but fracturing of the gop, no, i dont see any major fracturing at all. The democrats have not been willing to play on this regrettably so you have a polarized political atmosphere. I get all that. I think, frankly, as the dust clears and matters move forward, the disposition of the Health Care Reform act is going to be the key to any business tax cutting and what i would call more market oriented stuff. Sarah, whats your opinion . Larry seems to think this distraction wont derail and might not even delay the accomplishment of, say, tax reform or other thing. Do you see it that way . I dont know it derails it entirely but delays it. One of the reasons anymore you have a distraction like this, and this is going to be a big distraction that goes on and on and probably ends with the special prosecutor which then causes people in the Justice Department, potentially people in the white house, to start hiring lawyers that takes time, energy and effort, and that means people are focused on defending themselves and not defending and proposing and promoting President Trumps agenda. And so i do think this was a miscalculation, the way this was handled by the Trump Administration. But the action is legislative. The action is in congress not had in the white house. This investigation focuses more on the executive branch than the legislative branch. It does. Its a very fair point. We may have just lost saras go ahead and pick up. I think you make an important point. Im not here to disagree nobody knows how this will play out. Youre right this is legislative and the white house has all of its troops engaged in both health care and tax reform right now. Heavily engaged. So, again, i come back to my paul ryan remark. In some sense they know they will push back health care in the senate, for example, which means it gets pushed back having nothing to do with this. This was out before the comey announcement, speaker ryan said that. Mitch mcconnell has been saying similar things. Well go slow on this. Thats a more important issue, frankly. And its important to divide this up. The actual damage and disruption internally there will be a new appointee. Im not saying it will be business as usual. Donald trump gets involved in the scrapes and somehow coming out of them. Sara fagen, i understand the concept, a lot of people in america probably agree with the firing of james comey. Probably some republicans. Probably some democrats. Is this going to be a perma cloud, that and russia, and they are connected, that hangs over the president and thats the problem. Its not the fundamental architecture of politics larry was referring to. Its more of this cloud where people might want to stay back from any support of the president even if they want to do it. Well, yes, certainly dumped fuel on the fire relative to the russian story and he may be the person most in need of the special prosecutor now because it may be the only path to clear up the cloud that has surrounded the white house. He has to clear that. As it results to the agenda i think if republicans go through the reconciliation process on either tax reform or health care which looks likely they have no wiggle room. None. They need republicans rowing in one direction and these types of investigations where republicans feel on their heels, particularly as we get closer to a Midterm Election later this fall, they start thinking about themselves and their own political fortunes as opposed to potentially taking a tough vote on an amendment for the president. Its unfortunate that were spending today talking about this as opposed to the importance of getting tax reform done. It is. I agree with sara on that. No one is saying trump had anything to do with it. Trumps associates in the campaign, yes. And that needs to be investigated carefully. There will be no special prosecutor. The Intelligence Committee will continue his investigations. Hes very keen. Hes a conservative guy, a trump supporter. They have to do what theyre going to do. I just think, again, i dont perhaps the republicans will fracture on this. I just dont see it, frankly. Its a political judgment. If you disagree, i get it. Does this hurt trump politic politically . Im not convinced. I may be wrong but i dont think it hurts trump politically. He is teflon. Larrys right. Hinges tend to not stick to him the way they do to other people in politics. All right. Sara, thank you very much. Larry will come back later. Well talk about this and more. Market reaction, if you expected to wake up today and see the markets moving violently on the news of jim comeys firing you would have been wrong big time. All three major indexes hovering about the break even, zero. The volatility index still trading below he 10. Is the market really discounting the dysfunction in d. C. Or seeing it as irrelevancy. With rbc capital, david kelly is chief global strategist with jpmorgan funds. I think i know what youre going to say, this is todays story, its very important in the White House Press room but not very important to investors, what matters to them is the underlying strength of the u. S. And global economy. Yeah, and thats been the case for the last five months. The first three weeks after the election the trump darling stocks, companies that would n benefit the most from tax changes and regulatory changes, you know, torpedoed ahead or jumped ahead. But since that time theyve given back all of those gains. And since election day there is no trump trade in the market. The market is higher because the underlying economics are stronger. The earnings are great. This earnings season was fantastic. Right after the election it was all donald trump. David, your thoughts here, my hypothesis has been that the main change that donald trump has brought is in the climate, the sort of emotions of the market rather than any particular legislative accomplishment and that that remains, investors and Business People understand that they have a friend in the white house and an administration that will be friendly to business and not get in its way. It rather is going to get out of its way and that trumps everything. That may have to do with the movement of the market. I actually end up in the same place for different reason which is that between what larry kudlow was saying about the Health Care Problem that may delay the full implementation of the trump agenda. The trump agenda is a mixed blessing for the stock market. Yes, cutting Corporate Taxes will be positive but restricting immigration, tougher on trade, those things are not positive for the stock market and a full employment economy would balloon the deficit and overheat the economy. The full trump agenda wouldnt be good anyway. Its a case of two wrongs making it okay. Is it possible it may not be good for the economy but it may be good for the stock market . Only temporarily. The worst thing for the stock market would be the Federal Reserve raising rates aggressively and pushing the economy into a recession. The problem is if you push as much fiscal into the economy right now there are things we very much like the idea of Corporate Tax reform. At full employment you will overheat and cause a fed reaction. If you can just stretch out this long, slow expansion for a few more years without recession, thats probably the best. Im not taking anything away and the positive benefits of Corporate Tax reform, but lets not forget, as ive pointed out many times, the stock market, the dow is up seven of the past eight years, 18 , 11 , 6 , 7 , 26 , 7 , neglect ative 2 . 13 . Everyone says will this derail the election, its a big world out there. The United States are doing better than they were five, six years ago. This is a continuing trend. Earnings this season, eps growth and in europe its Something Like 23 earnings growth. This is not a u. S. Recovery right now. It is a Global Recovery and i cant agree more with david that taking it at 4. 4 Unemployment Rate economy and then putting extra kerosene will drive the it fed to crush this thing. I kind of disagree if the fed kills the economy because of too much inflation theres a risk of the economy ov overheating when were at the a 2 growth rate. That would have to be a lot of kerosene on the economy. Were at a low underlying trend of growth and that will be around for a very long time. Were seeing wages rising. Every secotor is indicating theyre having difficulty finding people to find open positions pushing on this economy will do nothing but draw the fed in. Its not going to get more growth because theres not more workers to put to work. We have to leave it there. Thank you, jonathan and david. We appreciate it. N adidas is a company to watch because taylor made, the brands owned by idadidas, have offense been sold. Taylor made, adidas, rather, inked a deal to sell its brands to a unit of kps partners, a private equity focused shop that specializes in industrial and manufacturing businesses. As a result of this adidas says it expects its forecast profits to stay the same. So, again, kps taking control of these guys in a deal contingent for 425 million, a mix of cash, secured notes and other contingent conversations, guys. Back over to you. Thank you very much, dom chu. A news alert. Tenyear notes up for auction. Rick santelli is tracking the action. Yields hit session highs at the back of this, rick. Reporter nothing could make a dplus on the three year look more important than a straightout d as in dog, for todays tenure. The one issued market was spotty. We ended up with a 2. 40 yield. 2. 40. I didnt even see that in the range of the one issued market today. If you go through the internals of these 23 billion tenyear notes, every internal is on the weaker side unlike yesterday it was only weakness and pricing and average stats, 2. 33 bid to cover. The weakest since december. Tomorrow is the 30year bond and based on this activity i wouldnt look for any bright spots tomorrow either. Back to you. Rick santelli. Still ahead, concerns about espn. Disney shares taking a hit. Where does the stock go from here . Our next guest says theyre heading lower. How much next. And if you think youve seen some fiery White House Press briefings today, could really take it to a whole new level. Sarah Huckabee Sanders will face the press in a few minutes from now. Youll see it right here live in moments. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. We will be in a business for espn product. We hope to launch one on our platform before the end of the year. Were increasing engagement with our app significantly with that comes not only more brand definity. We are confident in espns future. Shares still lower after missing on revenue. Shares down right now. Lets bring back the analyst, a market perform rating, a price target. Great to have you with us. Thanks. What do you make of the Market Reaction to the actual report . I think it was what the market expected. Disney said a lot about losses in advertising. I think the media stocks have gone down every day for the last week. Investors are rotating out of the space. Bob iger was trying to push the idea that growth would offset the losses they would see when it comes to people pulling the court, et cetera. A cable subscription versus what disney can charge. Far more volume in terms of people subscribing specifically for espn versus cable and satellite tv. Obviously depends on what the price is. Disney gets 7. 50, 8 per month through the traditional cable operators. One way is to say well offer and charge 20 a month for and for people who really love sports to try to make it work that way. They could also go the other way to make it a lower priced product to make it up on volume. The reason theyre not rolling it out yet they dont know what the right answer is. Its not clear what the right answer is. So i think theyre trying to bide their time as much as they can until the situation is clearer. Do you buy the argument theyll be able to make up what they lose in cable subscriptions eventually . I think its going to be tough. I think its not just espn. All Cable Networks face the problem Services Like netflix and amazon provided to consumers where theyre willing to offer you content for a very low price. And theyre able to do that because theyre willing to accept much lower margins than the average Cable Network makes right now. I think all Cable Networks will face downward pressure for the next many years. I think espn will be one of those networks. There probably isnt a lot they can do about it. We have to go but how many percent of their s