John fort made his way back from San Francisco and striking a some what hawkish tone today saying it strengthened in recent months and Sean Matthews joins us to help us react to some of this. Thanks for being with us. Good morning. For being quote unquote hawkish why is the market up. When you look at her statement its shortterm hawkish but longterm still very dovish in a lot of ways and data depen debit which means the market feels comfortable that well be at low Interest Rates for an extended period of time. Meanwhile you have oil in a bullish pattern today. Gold up 12. At what point do we take price action as a real barometer of reaction to the speech itself. Its still an august day so the reaction is some what muted and well severe the next 30 or 60 days what happens and i still think that everyone feels kfr comfortable which is why you buy financial assets. They look really strong. To a certain extent the feds job is to make sure that they telegraph a rate hike so there isnt a stampede out of certain Asset Classes and into others. Do you see the comments as trying to repair the market or trying to foreshadow a hike in september . If you look at some theyre starting to talk about rates going up over the last month or so. Everyone is starting to have that feeling. December is right now 50 50 in a lot of ways but they want to raise Interest Rates and will look at data and make sure that everything is fine before they do. Just seems like the data is pointing in the direction of a hike for a long time and theres every excuse not to do it. Is the fed out of the excuses . The longer you wait based on the data you have today doesnt that introduce the risk that there will be another reason to delay a hike . Well, the fear is that youre going to get behind the curve at some point in time certainly from an Inflation Expectation but you have the increases putting massive pressure on the middle class in a lot of ways that are giving them comfort that they wont get too far behind the curve. Some of the data that were getting, this revised gdp number, every time you want to say that something is running high you get something that pushes you back from that dont you . Thats part of it. China is going through a lot of pressure in their economy and you have europe going through pressure. Were an island. Our economy is doing well but from a global perspective theres still head winds out there that have to be worked through. Do you see any of the head winds making u. S. Stocks look like a less attractive alternative . Because all signs appear to be pointing to the fact that the u. S is the best house in the neighborhood still. I agree. U. S. Stocks are in good shape but its expectation management as well. You have to start thinking about from a 3 to 5 year time and what are the returns going to be on u. S. Stocks and theyre mid single digit returns. And will be the right level and people have to stop thinking about im going to make 10 or 15 on he quillties every year. This is a new paradigm and you wont have multiple expansion occur forever. When do we bust out of this narrow range or at least the volume pattern for the past month. Id like to know too. The market has been in a really tight range. Can this go on . Yes. It can. And i think the markets are grinding higher so everyone feels comfortable that theyre going up. Theres a Massive Convention in the marketplace and more cash starting to go to the sidelines so i think we had a good earnings season and people feel comfortable. I dont see a lot of volatility for the next couple of weeks and after labor day well see what really happens in the market and overall i would probably be a seller of equities going into the end of the year in a lot of ways and i think hah the mark place will start to focus in on what is the longterm Value Proposition of equities and thats mid single digit returns. Youd be a seller looking through any historical september weakness. 4th quarter tends to be historically positive. They rally hard in the 4th quarter but we had a significant rally over the last couple of months here and that will start to peter out into the end of the year. Rates will stay in the ten year is really a low volatility rake as well. 150 to 160 on the ten year. Curve is flattening but its a relative value play. You look at relative value now and from an Interest Rate perspective were at the high end of rates and from an earnings perspective and Equity Perspective were in good shape but eventually people start to look at it and say let me take some chips off the table especially when we have rallies. It will start to get choppier hopefully but rates will certainly stay benign. Is that what it is . Taking chips off the table . You mention cash moving to the sidelines but the majority of s p year end targets are exactly what we are right now. Correct. Which is why well see some pull back going into the end of the year and peel will be more cautious about where they stand in the marketplace. Multiple expansion which has driven what we have seen over the last couple of years wont continue to happen. Can they go lower . Sure but from the perspective of where we stand on a global perspective, rates are really low. They cant go much lower so certainly the next question you have to ask yourself is where do i think earnings power is and earnings power isnt particularly great on a global basis and thats going to be the constraint in the equity markets. We covered some ground there. Thanks so much for that. Well see you soon. Thank you. Talking about yellens speech and we will hear from stan fisher on about 20 minutes here on squawk alley. Some reaction to yellen including the back and forth. And the markets clearly indicated that they dont think that yellen increased the chances that theres going to be a rate hike in september. A very interesting speech. Only three photographs. And heres the case for increase that has strengthened in recent months. We did see stocks move down on that but as she always does she hedged the bet by throwing in qualifiers like this. The economic out look is uncertain so Monetary Policy is not on a preset course. There were other comments following up on this that hedged that. What does it all mean . Yellen implied that every meeting was potentially live but did nothing to indicate that september was more likely than traders thought before and the markets reacted nationally to this. I said earlier this morning there was only modest risk to the upside here and the risk was to the down side. The s p 500 moved four points since the yellen speech. That would indicate that the markets are pleased she is not going to do an immediate rate hike but theres very little upside for stocks. If you look at banks that move up on the initial headline they have since then moved to the down side. Theyre not anticipating an immediate rate hike. They tend to move in opposite directions here. Utilities moved down and are now essentially up. That indicates theyre not betting on a rate hike as well. Its now down below 13 again and we have been emphasizing september, october, november when youre into the elections theyre elevated but even they are down on a daily basis. So the risk is to the down side. If yellen relationship really appeared hawkish and the market believed that stocks would react very negatively quickly but if she did not clearly tip her hat on september there would only have modest upside. What the market is pricing in this yearful. Does this mean that overall the markets prepared for rate hikes or that its always tomorrow and therefore the market is not prepared . The market can handle a modest rate hike. Particularly with the economy improving. Were hearing better numbers. I think the economy can handle a rate hike. And frankly i would and i think everybody believes it as well and the markets can handle that and janet yellen acted like janet yellen today. Even with her deputies saying time is right here in front of us she backed off on it. The initial headline same was hawkish but the rest of it was not and the markets are saying here she is. Thank you, bob. Dont miss our exclusive with stan fisher live from jackson hole in just about 20 minutes. When we come back this morning, more backlash from mylan as heather looks to close the book on the epipen pricing scab dahl and kara with the latest pulse from the valley and then patent trolls. The movie. Why adam corola thinks its a great idea. When squawk alley comes back. Theres loof places you never wanto see 7. 95. Fidelity where smarte investors will alws be ifnlthe signs were asbvious when you tr fidelitys active trader pro can help you fd smteeny anexit points and can heroct ur potential profits. Fidelity where smarter investors will always be. [announcer] it a force of or a sales event . The summerf di sales event is here. Not close to session lows or highs and watching the tenure as well get up to 159 and now 154. Health care and pharma are one of the worst performing this week. Trying to change the conversation around the epipen pricing controversy. Meg is back with the latest with the situation thats going to engulf the country club. Hoping its going to shift elsewhere. Its not going to happen today. Now the drug industry is hoping this isnt going to seep into concern about other drug price hypes. You can see here they had a tough week down about 1. 5 peculiar and today it is coming back a little bit. Now the goal here is to push the focus on to what she calls the middlemen in the system. The Pharmacy Benefit Management that had a tough day yesterday saying it incentivizes higher drug prices through the middlemen. We talked with them on squawk box this morning. Here is what he said. Surprised yesterday that mylan blamed pharmacy benefit managers that have nothing to do with the price hike and blame them for all the things of why they raise the price of the drugs. Raise the price of the drug if you want to. Were used to that. It come with the territory but dont blame others for it. Its a simple thing they do when theyre going to face competition. They raise the price of the product. Its nothing new but own it and take responsibility. Dont blame others that have nothing to do with it. So the back and forth between the payers and the Drug Companies is nothing new, analysts are saying this usually takes place behind closed doors so today the analysts coming out defending saying these are two big reactions here. Jeffreys with a note titled the allergic reaction to mylans pricing. Headline seems overdone. What you see is recovering a little bit today, john. Thank you, meg. Huge story. Everybody talking about it. The election is only 73 days away and president ial candidates are still courting Silicon Valley but this week the Silicon Valley firm redesigned their homepage to say well you can see it there if youre watching on tv and radio, f trump. Kara joins us to talk about the environment. We all know that Silicon Valley not only leans left it dives to the left so i dont know how much of a surprise this is but this is also a week where we saw tim cook and lisa jackson of apple host a fundraiser for Hillary Clinton. What is this showing about enthusiasm for clinton or lack there of or just donald trump in Silicon Valley. Its pretty clear. Im trying very hard not to say that word on the air because youll be angry at me but its just trying to get some attention to this issue because most people in Silicon Valley are opposed to donald trump. Largely over issues about lots of things, intolerance and other things like that but the immigration issues which are now so confusing is based on a statement yesterday. But most of Silicon Valley leans democratic and other prominent republicans here like meg whitman but she has been incredibly tough on him. Clearly this year but not as enthusiastically as they were for president obama. Do you expect any longterm impact on this Silicon Valley political fabric. In some way will this make a less controversial republican president ial candidate more attractive to Silicon Valley. If theyre more friendly to immigration issues . Some of the other issues more porn there. Anybody but. Not many venture capitalists put that on that and put a statement up there on the website. And theres been increasing opposition to trump. This is such an outlying strange year. Met whitman is not going to be supporting that next election. But it is unreasonable that all the others shifted over but the question is how much money can Hillary Clinton raise here and how much has she . She raised a lot. Theres a lot of fundraisers and is it as enthusiastic as president obama . Probably not. A lot of bernie supporters now shifted over to Hillary Clinton but in general Silicon Valley is pretty much supporting Hillary Clinton. I havent talked to anybody thats not or in some way giving her money or something. We have been covering the fundraisers that the valley is holding. Josh lipton reported he wants a friend in the white house if Hillary Clinton dpuz get elected but what is the risk that tech further alienates itself from washington if donald trump gets elected because that relationship has been framed for the last few years and perhaps they meet a friend either way. I dont think they care. I think they would oppose a lot of stuff. You know, tech is very powerful. What exactly would happen. Immigration issue is very serious. Obviously theres fight with whoever is in the white house over encryption and thats been a big deal and Hillary Clinton has been firm on that. She has talked about talking to people but she is on what the white house has been saying so theres going to be back and forth with any administration but i dont they they will back down from their issues around intolerance just like what theyre doing in North Carolina and indiana around gay issues so i dont think thats going to change that much and i dont think theyll cooperate with the Trump Administration just for political points on major issues at least. I wonder whether those in the valley critical of trump and speak out about it expect it to swing any undecided votes. I dont know. You know they have a lot of money. These people have money just like hollywood does or other groups and wall street and stuff and theyre talking with their money essentially. I dont think theyre trying to swing anybody because tim cook did a fundraiser but he hasnt come out against trump very strongly and neither has mark zuckerberg. The only one that has is jeff besos and meg whitman which is interesting. So youre not going to see a lot of loud political discourse. Because whats the point. You probably should because a lot of the things he says but youre not going to see enormous amount of protest. Youll see money just headed her way i think. All right. Lots of money out there to head in one direction or another. Have a great weekend. Thanks for joining us. Thanks. Still to come on squawk alley, why adam corola is helping promote a new movie about patent trolls and dont miss our interview with stanley fischer. His take on Janet Yellens comments many less than ten minutes. But lened hoto f justo come bacin a new diuise approachg mecare elibility . U y inyou can put off checking out your mecareptions u ye sixtyfive, but now is a good ti to get thllli. In mind,r medica ocovers aut eighty p pcent of parb mel costs. The rest is up to you. Sud by unitedheahcare insurance companme in. Like all sardized medire pplement insurance pla ey couldelp pay some o what medardoesnt, saving yououtofocketmedical co. You l lrnrn that tang form sps call now a request this frerenc. Si gde. Its full of infmation on medicare and the rgef aa medicsupplement pnsto chooser needs and budget. L pls li theetou choony dtor rections. Hoal that acces medicarepatientk unitededcare insurancecoanhas os rp medicarsupp plala how an, d goong™ for you hoal that acces medicarepatientk endorsed baarp,medare suppleme iurance pns anrganizion seinthe needs of pe pl, out of teplantions. S rvey sath wou rommendir an to a fr. Rember, medicare d cer everhing. The rest is up tyo call nrequest ur free decion guide d start gathering the coidence. On you need help u keeh go long™. Jane wells is out with the full story. Hes not putting any money into it but is supporting the whole idea. They dont make anything but they own patents and sue violators. Seems an odd plot for a comedy. Congratulations. Thank you. You have been served. An indy film out of austin called the trolls focuses on a tech company that made a cell phone battery that never dice and is then sued for violating a patent. A lot of these cases are tried in east texas and a fan of the concept is adam corola that was sued over his podcast. You know how orange is the new black . What happened is the new excuse. Two years ago he was sued piano personal audio that claimed the way he gattis tributes his podcast violates the patent. Rather than settling he fought back. Raised a half Million Dollars through crowd funding including 75 grand in a failed attempt to get the venue changed in california. We swore we were going to fight and we said were going to crowd fund. Well get my audience behind us and well fight these guys. Were going to stand up for all podcasting because once theyre done with me theyre going to go after joe rogen and whoever else is podcasting next. Theyre not going to have a sen you change so guess who has to get on an airplane and stay at a hotel and eat at a diner . Guess who needs the occasional prostitute whatever it is, theres money going into that. If youre going to travel, youre going to travel right. But the point is id be back and forth to texas ten times and the hotels are getting rich and its an entry. Now personal audio hasnt responded to our request though they did drop the lawsuit. More from carolla including his thoughts on the president ial election as well as we talk to the films creators later today on cnbc. Com. Thanks. Were a few moments away from our interview with stan fischer. Well get his take on yellens comments and outlook f