Welcome to power lunch. The dow took a triple drop when donald trump junior released an email of his plans to meet with a russian attorney that apparently had information about Hillary Clinton. The major averages have mostly recovered. The nasdaq back in positive territory. Higher by 3 points tyler . I thank you very much im Tyler Mathisen we begin with the latest developments on that email drama involving donald trump junior, russian interests, et cetera, et cetera. Kayla tausche live at the white house. Reporter the existence of these emails first reported by the New York Times and later tweeted the enfire chatire chaid appear to show the motivation for the meeting that the president s son took in june of 2016 with a russian attorney said to be connected to the kremlin. It would seem to support that the purpose of which was to obtain incriminating information about Hillary Clinton, then the president s opposition in the president ial election. According to these emails, a publicist who is attempting to get this meeting, this is obviously very Sensitive Information. It is helped along by two individuals who were reportedly acquaintances by the trumps family the president s son says, seems we have some time. If it is what you say, i love it, specially later in the summer we are still waiting on news of exactly what the substance of this meeting was the white house has claimed it was very short and no followup. The attorney in question, which was on the other side of this meeting told the today show it was the trump family that wanted the information and that they wanted it badly. We have not gotten an official response he says the vicepresident is working every day to advance the president s agenda he was not aware of the president s meeting and not focused on stories about the campaign, specially those pertaining to the time before he joined the campaign. As recently as yesterday, White House DeputySarah Huckabee sanders, was asked about this meeting and asked about exactly how it came together and whether, in fact, there was incriminating information shared the president was only made wear of this meeting a couple of days ago. We will have to wait and see what the white house says now that these emailshave been released whether they will have a changed statement on this matter we are expecting a briefing off camera by sara sanders and well let you know if we have any developing details in the meantime another shocking turn of events for lawmakers that had hoped to spend the week focusing on policy Like Health Care and the budget the early reaction from gop lawmakers had hoped to put this behind them, this turn of events and these emails between donald trump junior and people with information with connection to the russian government is deeply troubling. Here is South Carolina senator, Lindsey Graham any time you are in a campaign and you get an offer from a foreign campaign, the answer is no i dont know what mr. Trump juniors version of the facts are. He has to testify. That email was disturbing what was equally odd to me is that the person they met with knew absolutely nothing. I dont know why they would pick somebody who didnt have any information about the Clinton Campaign reporter i caught up with senator tim kaine who serves on the Foreign Relation Committee he says donald trump juniors first call should have been to law enforcement. The emails are very troubling. I think have the dates right on june 3rd, he gets an email that says we want to meet with you as part of a highlevel russian government effort to elect your father. That should have set off red lights instead, it set off, i want to know more. Reporter House Minority leader, nancy pelosi says, this white house is riddled with shadowy russian connections. We will be hearing from the gop and let you know what their reaction is when we get it lets bring in john harwood for more analysis on this story. John the significance of these disclosures is we have now moved from the question of is there plausible evidence of collusion or attempted collusion to what does that mean clearly, you have an attempt by donald trump jr. , paul manafort, Jared Kushner to get information they knew was billed as coming from the russian government from what was described in the emails as a russian government attorney donald trump junior has said that the information did not have value we will see if there is more to learn about that now, the question is for months, the white house denied any collusion. Legally, it is in dispute. Some people think it would be illegal on its face to accept information of this kind from a Foreign Government others disagree with that assessment politically, it is clearly a new position that were in now this is more difficult for republicans like Lindsey Graham who we just played the bite from to defend. This is something that you are going to see the senate and House Committee look into. Legally, uncertain politically, this is very damage to the Trump White House sgchlt wisgchlt how legally damaging are these emails . Joining us is jeff jakobitz good to have you here. Nathank you. You have read the emails and are they legally damaging if so . By how much. I think we go further of if it is plausible evidence of collusion and whether it is conspiracy i think you have Robert Mueller investigating the criminal aspect here, you have a situation where the intent is very clear to go into the meeting to obtain political dirt on Hillary Clinton. Three people at the meeting appear to be knowledgeable if the information wasnt turned over, which the white house alleges it wasnt, these people leave. Why did they leave if they werent there to get the dirt . Do you see this, are you talking about federal election law, which says an agent of a Foreign Government cannot influence a state, federal or local election is that the law . I am talking about conspiring to obtain a thing of value from a foreign country. It is a foreign adversary and whether it constitutes Election Fraud or not collusion, which is the word that has been thrown around loosely over the past months is not a crime. There is no such crime as that conspiracy, however, can be. I dont want to imput motive donald trump jr. And his brother were rookies in politics could this have been clumsyness or unawareness of what the laws said you could and could not do . These are people who are sophisticated businessmen who are surrounded by lawyers. They could have asked the question, should i go to the meeting or not should i attend the meeting with russia, a foreign adversary or not you are saying only three people knew about it it is not clear others did not know about it as well. Lets go back to this conspiracy idea. Collusion, not a legal term necessarily. Conspiracy to commit Election Fraud is, and i briefly purr used the statute this morning you look at the idea and legal basis. It seems like it would be on donald june juior and possibly kushner. We dont know who the president had lunch with that day . Did he have lunch with manafort and discuss the upcoming meet sng d memee meeting . We dont know those facts. When that comes out, we will know more about what that involvement will be. You point out they left the woman they met with the attorney tells nbc news she is not associated with the government in the email, they clearly think they are going to meet with someone from the government if the meeting leads to nothing, is it still conspiracy we dont know what happened at the meeting if you look at chronology, the hacking occurred soon there after. The leaking of the information occurred about a month later we dont know what was discussed at the meeting and whether any agreement came to fruition if, in fact, from the emails and the New York Times story on sunday, it appears xleer tclt the russian government was involved and that donald trump junior knew about that the white house has says the president was not aware of this meeting. I believe thats the case. Do you find it curious, jeff, that it seems as though. Donald trump junior is under no obligation to disclose, as i understand it, all of his meetings with foreign people, because he is not a u. S. Government employee, neither is mr. Manafort but mr. Kushner is. Do you find it curious na so many people have forgotten so many meetings with russians . Thats an inference of guilt. One could look at that and say, is there a coverup involved why are these meetings forgotten . There was one time they were saying that the fbi was telling them not to include all the meetings in the ss86. The disclosure form i any it unlikely an fbi agent would say that thank you very much, jeff we appreciate your time and help so that news that we have been talking about here for the last 12 minutes did seem to spook investors early today. The dow quickly did drop more than 100 points before rebounding back. Right now, down about 8 points thats all will the d. C. Drama create a Tipping Point for this market. With is christie mitcham, the second most famous graduate of Davison College after steph curry. A long way down after him have you seen any evidence so far that investors or people beyond the beltway care about all this i dont see this as being a market moving event. In terms of what we are hearing today. Could it become one if they were to blow into a criminal investigation and we were to see a real change in the trajectory of the reform they are able to enact, i think yes in the current state, i think know i think the market is going to quickly rotate to whats most important, the start of earnings on friday and yellen tomorrow. When you meet with your team and talk to clients, im sure this is a subject point but it is not determining your investment allocation at the moment, is it . No, it is not one of the biggest things that we have been talking to investors about really recently is something that i think many people may be missing. Weve obviously had a very calm market in sort of continued ratchet up. Below that, what we have really seen is a c change that storms are starting to act quite differently from each other. If we look back to 2012, what we saw was stock correlations that were at about. 65. All stocks were kind of moving together if we look at where we have been so far this year, it has been between. 2 and. 3. What that means is that there are opportunities for active investors and weve seen just that the average active investor actually outperforming in four of the last five months in our own franchise. 70 of our active strategists outperforming their benchmarks by 150 basis points. I think thats the opportunity the opportunity is to drive toward conviction. I assume thats what you are telling clients who want to put it in an s p 500 etf and not bother tepo pay fees. There are times when fees make sense and some that dont the last few, index funds make sense. This is the time to think about rotation four or five months is very nice for the active stockholders let me turn to your target date fund complex. They have become extremely popular, specially in 401 k s. Are they a promise that is in danger of not delivering is there a implicit promise that target 2025 fund, target 2040 fund, that the money that i need is going to be there and that i can count on it. The truth of the matter is, these are market things. We dont know. They are. Thats a really important part what target funds offer is easy diversity kags that is age appropriate. They arent a panacea for undersaving. They are not an annuity they are not an annuity it is important to recognize the biggest determine nat of how much you have in your 401 k is how much you put in. Do i think people investing in 401 k fund are better than left to their own devices absolutely do i think it is a recipe in and of itself for success. It has to be combined with other measure that is help individual investors. Those are things like auto escalation, increasing savings what is auto escalation i will. Freshman alert as a function of time, you automatically increase the deef deferral rates for participants. You start out at 3 and then 4 and then 5 and then the next year, 6 we need to make it easy for people to save more to make it automatic. Thats going to make a difference when people ask me whats the single smartest move i say bank your raise this year. Start at 1 and then go to 2 and by ten years if you can make it automatic, even better. It is simple. It is the best advice. Pay yourself first. You are worth it, tyler. Christie, nice to have you with us. Good luck to steph curry i hope you can get some of his money. 200 some million. There is an alert in the bond market. Threeyear notes up for auction. Who has the news santelli whats the demand, rick . Hi, tyler demand at 1 00 eastern was a b, an aboveaverage objection. 24 billion threeyear notes, dutch auction yield 1. 573. Right around 157. 5 1. 57. 5 is where the one issue was. The price, 2. 87 to cover 2. 87 chasing every dollar that was for sale securities pretty good above average. Above average 52. 6 on indirect 9. 9 versus the 10 action of 8 . The best since halloween of 2016 dealers take 37. 6. You know when it is going to get a little more dicey, not tomorrows tenure, although janet yellen is on tap i am thinking the 30year, which will hit thursday. After all the question and answer tomorrow, it should be very fascinating to see this total of 56 billion in supply move through considering all of the issues wednesday and thursday that will affect the long maturities. Sully, back to you rick, thank you here is whats coming up on power lunch. The retail rep billions have been wiped out, macys and jcp we are going to have shocking stats and talk about whether retail destruction has been overdone one stock thats proving to be a little amazon proof, up 35 . In the state of Small Business, what is the latest data signaling we are going to go to the source and ask a Small Business owner if he is more or less optimistic than a couple of years ago. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. A used car, big day for amazon prime day. It is up 32 so far this year. Very different story for its retail rivals, as many of you know this year, three examples, macys, jcpenneys and target, all down 30 45 in 2017 we could have made it longer list brian is taking a deeper dive into retail destruction. We know it has been a tough year did you know just how bad it has been look at some of these stats we have put together. These are the market value losses of a few big retailers that you know just this year target has lost just over 12 billion in market value in six months the market cap of target now just 27. 5 billion kroger has lost more than 10 billion in market valuation. Macys nearly 4. 5 billion. Bor barnes noble has lost 297 million. Its market cap a touch over 500 million consider that. Target has lost nearly two macys worth of value in six months as prices come down, so too do valuations some of them in a big way. Lets look at the price to sales ratios of some companies that compare their stock price to their total revenues as you do, keep in mind that the average s p 500 stock trades at 2. 1 times sales according to morning star target trades at just 0. 4. Macys, 0. 3, krogers, 0. 2 jcpenney and barnes noble. 0. 1. Amazon, 3. 3 times sale for many wellknown retailers, the market is pricing in almost no value on their actual business, almost zeer roar fro s does this mean some are a great buy for you right now . We have dana chelsea and olivia chen at cowan. Jcpenney trading at 0. 1 times sales. Zero value on their underlying value. Is there any value for your clients and our viewers . Whats that telling you is there is no expectation for some names. A lot of the companies, there was a Tipping Point in the Fourth Quarter with online and offline saying, we are only going to be an on liline world, dont think that is realistic. Look at the off priceers, the t. T. J. S of t t. J. X. And ross. Jcpenneys sales are worth almost nothing for the valuation of the company like jc penny. Do does that mean the selloff has gotten to be too big yes, the selloff has gotten to be too big. Jc penney is putting in new categories of merchandise. They have the benefit of sephora in the stores. They Just Announced sales in the Second Quarter is significantly improved from the first. Retail overall, im not saying that is going to be that much better we have a tough first half and cat alist for the second half. Oliver, what are the qualities of the company that is will survive and thrive in retail and the qualities of the ones that wont . How were thinking about it is that clients should focus on deep value stocks or Super Premium . What does deep value mean it means 4. 99 rotisserie chickens and name brands at 40 60 off at t. J. And ross and walmart. Customers love stores. If you can offer a great value, those are stocks that have good longterm potential. We like luxury goods when you go to Louis Vuitton or tiffany, there us a lot of trust. We view that as unamazonable as we zoom out, there are three major factors in terms of the mall physical store traffic down 5 10 secondly, tremendous digital disruption online sales 10 40 of sales. Lastly, this profound transformation in the way consumers shop they are all about social media. 40 of usage Online Mobile phones it is the real shift in the purpose of a store i agree with dana, a lot about merging bricks and clicks. It is a lot about using the store in a new way, completely new way. There us a real revolution happening here amazon