Thats why youre here. Cant find anyone. We have one guy left. Simeon. Is he bullish . He will be on. Already talked to him. One of the things hes saying is even if if there is a stumble in some of this stuff, market already deserves to be here, which is what i think. I think so, too. In terms of tax policy or that stuff is a bonus. Just not having the private sector vilified on a daily basis, not adding a new regulation, layering on a new regulation every day. When you take that off, its going to come back to a more normal level. Im with you. I think i know you are. The multiples are getting a little stretched, but Interest Rates, you know, stock prices are a function of earnings and Interest Rates. Interest rates are historically low still at 2. 5 roughly. Youre the one who coined t. I. N. A. I have. There is no alternative. And we have other things to talk about which in particular with the Trump Administration, were not talking about financial repression, monetary policy, were also talking about the other tools that governments can use to spur the economy, which means you will get a real business cycle. It makes the business more fun, frankly. I also think it will help active management over passive. Its not surprising that passive has done so well when the correlations are very high and the dispersions are very low because everyone has the same cost of debt capital. Now credit will be rationed, youll have a real business cycle. George costanza said he came up with the mother of all the first time i heard t. I. N. A. Was from jason. Theres no alternative. Margaret thatcher was the first person that came up with the phrase there is no alternative. Oh oh oh he was the first to make were the first to make it for the market. Lets look at the u. S. Equity f figures. We saw the dow give back 112 points after pushing above 21,000 for the first time in record territory. First time weve seen 24 days like that. Its only happened once before on the move from 10,000 to 11,000. This morning you can see the futures are flat. Dow futures up by 1 point. S p down by 3. Nasdaq down by 10. Overnight in asia, take a look, you will see the nikkei is down by a half percent. Stocks were weaker in china as well with the hang seng down about three quarters of a percent. The shanghai down onethird of a percent. In europe, in the early trading taking place, mixed picture. The dax is down by 0. 2 . The cac in france is up by 0. 3. The ftse is down by 0. 2. Crude oil prices slipped significantly yesterday. Worst day since january. Down 2. 3 this morning a gain of 15 cents. Wti 52. 76. Chart yesterday was interesting. For crude oil . For the markets. When sessions came out and recused himself and sort of succumbed to all of the that was unbelievable, wasnt it . When theres blood in the water yeah. The losing team sort of theyre grasping for something. They were all over it. I think he did the right thing by saying i will not be involved. At 3 00 the market went to triple digits. Some people were tying that to the notion when youre bogged down in all this crap you are not going to do the tax reform and not going to do the obamacare. Just 100 points after youre up above 21,000. Other people were saying because there will be a rate increase, which the Financial Times said the day before, we were up 300. If the rate is coming because the economy is moving, thats a good thing. If the rate hike is coming and makes stocks look less attractive, you can go on either side. 13 days in a row. Down 112, and still the worst day for the year. Lead story on this competing one of the competing websites is if you think that the tech bubble of 99 was bad, its nothing compared to right now. Because of snap . I dont know. Leads into this next story. Among the mornings top stories, shares of snapchat surged 44 on the first day of trading after pricing above the expected range of 17, it opened at 24 or so. And that brings the market cap to 34 billion. That makes snap three times larger than twitter, also puts it billions ahead billions of andrew owes me worth more than hilton, worth more than viacom. Worth more than hersheys . Worth more than ferrari . Worth more than her i have and viacom combined or marriott and target combined. I dont understand it. Someone said that the 100,000th snapchat follower is worth ten times what the million Instagram Follower worth. I dont understand it. Is it about valuing eyeballs for advertising . Younger people do spend a lot of time on it, an average of a half hour a day, checking it 20, 30 times. Their closest networks are on this. My daughter is 17, its 34 billion, its overvalued. She said theyre going to make more money. I said how are they going to monetize that . She said advertising. Nobody buys anything on snap do they. The Retail Investor has not participated in this market since 2009. If you have seen net redemptions from domestic equity funds, the thing thats also amazing, this is the reason why its nothing like 99, at least yet, theres been apocity of these companies that people love. The ipo market was down 40 last year. When you have these big events or companies that go public like a facebook, its an event. Its different than 99. You think it leads to people investing in the broader markets at all . I think there are average people who are looking at this saying watched it on snapchat and i actually like it. I want to get in on it. Its different than 99. I think were just getting warmed up on that. My own opinion. What you said about blake, that makes sense. Blake said im interested in this. But knowing that you use it a lot and knowing its popular, twitter does not equate to monetizing it. Thats my point to her. Maybe it does. Maybe i dont understand the business. Maybe its something we use frequently, twitter, is not cool. Something she uses is cool. It has to flow to the bottom line. Whether its whether thats the right valuation is another story. Whether theres a lot more of this to come, my own opinion is yes. Youll see more and more of these companies that are private go public. Your point i bet she never bought anything on snap. He used pocity, lucky its just us here. We will not talk about mike pence. I love this story. He was using a using a private email an aol account in indiana. State secrets of indiana could have been compromised. Hes thinking about charging higher tolls, the School Boards meeting in gary. He was texting someone. Any of this information could have gotten out. Any of this highlevel thats the same as hillary, isnt it . State Department Info as you lived in indiana. I did. Is anything going on in indiana that people want to hack . Theres all sorts of interesting things in indiana. Does it have something to do with the race . Is anything else going on there . Maybe russian contacteds. The indy 500 or the aol account makes it its hard to be cool with that. Thats the true thing about that. Mike pence was still using aol. Thats where he ought to be. Lets bring in eamon javers. Eamon, after that introduction, good luck. What do you have for us today . I have nothing to say about snapchat, by the way. I will talk to you a little bit about Jeff Sessions, the attorney general who yesterday, just a day after the Washington Post revealed that he met with the ambassador to russia after saying during his confirmation hearings saying i did not have communications with the russians, Jeff Sessions said he would recuse himself from any investigation into the russian influence of the 2016 election. Sessions gave that answer in the confirmation hearing to senator al franken. Yesterday he said the answer he gave was completely true. Heres what he said. My reply to the question of senator franken was honest and correct as i understood it at the time. I appreciate that some have taken the view that this was a false comment. Thats not my intent. Thats not correct. I will write the Judiciary Committee soon, today or tomorrow, to explain this testimony for the record. Sessions and his team have suggested that he wasnt thinking about the meetings with the Russian Ambassador when he answered that question because those meetings came in his capacity as United States senator, not in his capacity as an adviser to the trump campaign. Sessions was a bit vague yesterday when asked about what exactly this meeting was all about. It was during the heat of the campaign on september 8th, sessions said they talked about simply normal things. He said the subject of terrorism came up. The subject of the ukraine came up. But he did not offer specifics about what it was the ambassador wanted to talk to him about. He did get some big backing from his boss last night. The president put out a statement. Heres what the president had to say about all of this. He said Jeff Sessions is an honest man. He did not say anything wrong. He could have stated his response more accurately, but it was clearly not intentional. This whole narrative is a way of saving face for democrats losing an election that everyone thought they were supposed to win. For now the Trump White House will hope this stems the bleeding of that 24hour news cycle. Democrats called for sessions to resign. That, guys, is clearly not going to happen any time soon. A lot to of nuance here. The guys like limbaugh saying the deep whatever it is . The deep state. The deep state. All of the professional intelligence people and that piece about maybe not a stretch to say theres some effort by former Obama Staffers to, you know, release certain that was a good day for this to come out. Clearly. After the speech two nights ago. Perfect timing for that. Thats all anyone talked about yesterday. The day started out people saying, wow, even van jones said he looked president ial. It shifted from that to this. Joe, i dont follow you all the way down that line because ive been involved in writing investigative stories, not at this level but investigative stories before. They dont happen in 24 hours, they dont. Wait a second. So so some journalist was pounding the pavement to get this story . Please. No. No. But once you get a leak, if you get a leak, you have to spend some time checking it out. It doesnt just happen in three, four hours. All these stories have been handed to people on a silver platter. Yes, well they were handed to people who developed the sources who hand them the stories. The work is in developing those sources and people who might leak to you. What media outlet doesnt have sources with the democrats. Right. But its not the democrats, its the particular people who know about the meeting with the Russian Ambassador. Thats a very small group, right . Thats not the Democratic National committee. Thats not thats not the point of the wawall street journal. The point of the wall street journal is this is the jim carrey meeting, dumb and dumber. If anyone doesnt know this guy showed up in the Senators Office i didnt see the editorial. The senator didnt disclose it when he was asked and talking about meetings with russians. He said i did not have communications with the russians. You just gave what his response was. They were asking whether any trump surrogates met with russian operatives. Hes thinking about it in a different no. How many times has the Russian Ambassador been to Dianne Feinsteins office . The New York Times has an offlead story on how socially active this Russian Ambassador is. Sergey kislyak is Claire Mccaskill is a good one. What al franken asked him was not at all what he answered. Al franken asked him what would you do if it turned out that other members of the Trump Administration had had contacteds with the russians . He didnt answer that question at all. He just offered up without being asked his own denial and said he didnt have communications with the russians. He affirmatively put that out there in a way he wasnt even asked by franken. Was a threeminute question. Senators tend to be longwinded. I saw the other News Services played the entire question of al franken. Theres a lot of different angles to the way that question came out. Sure. His answer looked totally different when you watch the entire question. Sessions clearly felt he needed to put this to bed and put this out there that he didnt have communications with the russians. In his mind he says he was thinking about his capacity as a trump adviser, not his capacity as a senator on the Armed Services committee. That leaves open some of the question about why he met with the ambassador in july at the Republican National convention when presumably he wasnt acting as a member of the senate Armed Services committee, acting in more of a Campaign Capacity because he was at a campaign event. Still he says in his answer he was thinking about the campaign versus the senate roles. Hes the same guy sitting in both roles. He says that was what was on his mind. Hopefully he was colluding with them about how to win the presidency presidency, if it wasnt that, what are we talking about . Jeff sessions colludes with russias ambassador in plain sight. In plain sight. Thats the journal. We have to go. Fair enough. The only reason we should be talking about this is whether it caused the market actually to pull back after 3 00 yesterday. Thats the other question. Does this scandal mode consume this white house. Does it become the point where to the point where they cant focus anything else because theyre spending their days reconstructeding meetings which happened in the senate. Which is why sessions stepping forward saying i will recuse myself is the right move. Thats why this whole story is important to the market. Shouldnt we get something for this . You wanted a real cup . Yes. I have a real cup. I wanted to get paid for drinking like this showing the because theres not enough signage over your head . Were at the nasdaq. Yes. That coffee cup will make the difference. This is smart of dean. Yes. All right. Back to the broader markets. Joining us now is pro shares head of Investment Strategy and our guest host is still here for the hour. You were standing there. You heard me talking about you. Are you proud . We had a lot of people on, i it got to the point yesterday where i had heard it so many times i almost lost it. The idea is that were way too far long, weve played it forward. We have no idea if anything is actually going to happen. So the market is totally overvalued and due for a fall. Most of these people thought the market would be down 5,000 points when trump was elected. They havent been in the market for three months, theyve been saying dont buy, dont buy. I dont think they have a right to say dont buy yesterday as if its a new call. Your thought is it deserves to be here any way based on what. We only need a couple percent of Earnings Growth to justify something north of a 20 pe and were out of the earnings recession. Forget the volatility of earnings. In q4 top line growth for the s p 500 was shy of 5 . Thats more than enough to justify these valuations without getting to the administration sort of being, hairy audacious goals. What about just you know, the way you saw the nfib. Nothing and sentiment there. You saw Consumer Confidence, the philly fed. All these things that are a measure of people just thinking, wow, i think it will be a better environment for business. How much is that worth in terms of dow points . This has been a very slow recovery, we have had muted capital expenditure. People are underemployed. So theres a notion that we may not be at full employment because people might stop driving ubers and get real jobs. Perhaps there is more capacity left. May i ask what youre seeing in the flows of your funds . Seeing anything particular that would be of interest to our viewers . The thing that we have seen is flows into quality stocks, stocks that have grown dividends consistently. Because those have generated Earnings Growth evens in the earnings recession. Also if you look towards the mid and small cap space where people think theres the trump dividend without some of the International Hair on it, companies that have less leverage that might be less susceptible to perhaps fed Interest Rate increases has been a place where we have seen flows of late. So, just based on some of the stuff thats can you point to any of the deregulations that been done through executive orders that would also add to the bottom line of some of these companies . Even Interest Rates going up this much for banks, we should be buying the banks. The steepening of the yield curve is a good story. Other areas . Coal. The dow doesnt go up on coal. I think its so early to tell. The general sense that domestically focused Companies May be an enhanced beneficiary is about all the story is at this point. Theres not enough specificity. Do either of you think the border tax becomes law . I think theyll try. You . Wrong guy to ask. It makes a difference. I think President Trump is nothing if not bold. Hes going for it. Hes going for does he want to do that . I do. I think its the right policy. Its a very bold its true Corporate Tax reform. And i think at least from a negotiating point of view you will start he starts there. He starts at 120 a square foot and the problem becomes i understand our tax code is a bit of a mess and unfair to american manufacturers. If you put it on retailers, it will end up as a tax on consumers. It may exactly so youre taking away Corporate Taxes and dumping them on but the average consumer has more buying power. Will you