U. S. Equity futures this hour, lets show you whats going on, suggesting a flat open s p opening lower 1 1 2 points, the dow slightly lower and the nasdaq lower by four overnight in asia, quiet session around the world, generally. Hang seng higher over 1. 5 , but t shanghai was lower european equities. The dax is higher by 0. 25 france and the ftse slightly lower. Italys higher by a third and spain is lower by 0. 25 . Their yields are backing up over there once again that has resumed take a look at crude wtis lower by 20 cents, a decline of 0. 5 , 44. 15. If youd like crude delivered in august pepsico just out with Quarterly Results. Sara eisen has the numbers 10 cents above on earnings, i see, sara. Sure looks like a big beat. Eps 1. 50, versus the 1. 40 expected it includes a 6cent gain from a sale, but its an estimate, so its unclear whether that factored into the analyst forecast, but either way, a beat on the profit line, a beat on revenues as well for pepsico, 15. 7 billion. The estimate was 15. 6 billion so, pepsico sees 2 Revenue Growth overall Foreign Exchange is still a big headwind for this company. That strong dollar cuts into sales, shaved about 1. 5 off of that topline number. But overall, 6 Profit Growth is something that many packaged Food Companies would be very enviable of right now. Organic Revenue Growth, which is always a good way to strip out the extras like Foreign Exchange and show whats going on with the business, did come in at 3 , and that continues to also be above the rest of the industry, and it was also better than analysts expected. Fritolay is the big driver here the chips and the Snacks Division showing 3 organic Revenue Growth, versus 1 for the beverage part of the business, so thats pretty consistent with what weve been seeing quaker oats continues to be a drag, negative 2 organic Revenue Growth as far as indra nooyis comments, the ceo, in the report she said we continue to deliver strong operating results in the midst of pockets of macroeconomic challenges and increasi increasingly competitive retail environment. Volume growth was down for food and beverages, so the Revenue Growth is coming from pricing power. Theyre also getting big profits from productivity or cost cuts, which is a big theme in the Food Industry so thats i think where the questions are going to lie, but they did see a very Strong Quarter and continued outperformance versus the rest of the industry, guys. Well talk to cfo Hugh Johnston, in the 9 00 hour. Thats good yeah, im in touch with the company. I talked about i mentioned to one of their people that, you know, i see pepsi and i see a big bag of doritos because im on the scarsdale diet right now, so im like do you like the blue bag or the red bag . Ill take either. Ill take anything that ends in tos right now. I like the cool ranch. Across the line cheetos. Anything. Tostitos and the gentleman said to me that we have much healthier things to send you, like sabra hummus i said no thanks on that that be a big no smart food delight ive tasted that smart food popcorn. It tastes like youre eating the packaging material that people send i like the original. Not harvest and i said, do me a favor, send me a big bag of chili cheese fritos. Which they do also. Have you had them i havent. You havent had chili cheese fritos no, i havent what kind of a junk freak are you . You know what they dont have, sara, Skyline Chili cheese fritos, which is an idea, since all these places are branding with other people, as a cincinnati native thats an ohio joke. No, its a cincinnati thing. It is although dont have a huge market in cincinnati. Youre from the east side of town arent you from amerli we also had skyline on the east side of town and people loved it we probably had way more skylines theyre empty there youre eating the sabra hummus in indian hills and those places i grew up next to pete rose and not true. I have been raised arent you from amberly village . From amberly village. Yeah. You should see the houses there. Big threecar garages. Oh, my god. Oh, yeah. The staffs houses are huge. Back to you guys. Thanks, sara eisen. Well talk to a pepsi analyst later this hour. Ill bet hes had chili cheese fritos. Youre doing scarsdale . Thats like atkins high protein, lots of veggies . Scarsdale is like i mean, somebody killed the guy that invented it. And if he was alive, i may try to, because its okay. You dont eat it . Its basically starvation. You have a grapefruit in the morning and youre supposed to say thank you. Among todays top stories but it works. Eating less generally does. Funny that way. President trump ending months of speculation by announcing plans to nominate Investment Fund manager and former republican treasury official randal quarles. See what i mean . Only one l. What is that . Interesting choice as the fed i mean, in terms of just not using overusing letters and Everything Else, i get it. Brevity, things like that. Why make it more complicated than it has you can see his names randal, why do you need it its not randalll anyway, if confirmed by the senate, quarles would be the first vice chairman created since the financial crisis, but it was never filled during the Obama Administration. And snap is moving lower and you like your take on this well, they created a position to supervise the banks they never filled it and now the guy whos finally going to fill the position to supervise the banks wants to supervise the banks less chris dodd and barney frank must be thrilled about that. Right right. Where are those two guys who knows but theyre still around. I know. Actually, i think barney frank is a cnbc contributor, or used to be by the way, he wants to roll back the volcker rule as well. He does yeah, hes on the record saying he doesnt believe in it, so i would assume. All right. Snap is moving lower in early trading after shares oh, snap im sorry, snap below their initial Public Offering price for the first time the Parent Company of snapchat closed lower by more than 1 yesterday at 16. 99. Thats just below the 17 price when it went public on march 1st. Its not uncommon, though, for an ipo to dip below its offering price, especially in tech. Oh, snap facebook and twitters stocks both slipped and eventually bounced back, but snaps lockup period is about to end that allows insiders to sell some shares, and thats at the end of this month. And this morning, Morgan Stanley is downgrading snap to equal wait oh, nap and lowering its price target to 16 from 28, saying the ad product is not improving as quickly as the firm expected, and instagram competition is increasing thats the part that i know. They were supposed to have a new selfservice ad platform ready to go in june, and it was slightly delayed and then now, i havent read this Morgan Stanley note, but maybe its not working as well to generate as much revenue per user as they thought. Im delving into an area that, im not great at this, but i have heard from people in my family that instagram has a lot of i think theyre backing instagram more than nap. I think its still snap, but i think instagram oh, snap you can do similar things on instagram. Yeah, theyve added these story things where you can do videos and stuff. I thought it was dog ears or something, which right, right. They do. And pig ears and noses. You could get tired of that i mean, whats that worth, keon . Thats 10 billion right there in valuation, right . Who doesnt like to see themselves in a funny dog ear not something i spend a lot of time on. And Warren Buffett donated more than 3 billion in Berkshire Hathaway stock to five charities. The bill and Melinda Gates foundation received about 2. 4 billion of the total the four other charities are buffett Family Foundations and after yesterdays donations, Warren Buffett remains the worlds fourth richest person, according to Forbes Magazine he still owns about 17 of Berkshire Hathaway, despite having donated more than 40 of his holdings so far. In washington news, Senate Republicans are scheduled to be updated on the bill to repeal and replace obamacare during the closeddoor meeting today. Kayla tausche joins us now with more kayla. Good morning, michelle. Those meetings have been happening almost daily when senators are in session, as Majority Leader Mitch Mcconnell is trying to stitch together a Health Care Bill that can win 50 votes from his party a forthcoming version this week is expected to include changes like 45 billion in opioid funding, up from 2 billion in the original version, the ability to pay for premiums from Health Savings accounts and potentially this is what everyones watching for an amendment by senators ted cruz and mike lee allowing insurers the ability to offer nonobamacarecompliant plans as long as they offer one that is that amendment has been polarizing, but some on the fence like jeff flake of arizona, now say they support it others argue it would make the plans offered on the exchanges those would be the ones funded by the government too expensive. Lawmakers critical of the bill, though, are under more pressure this week as the group save my care launches ads last night in nevada, west virginia, alaska, and maine, using the senators from those states own words against them Susan Collins of maine, however, still appears to be a no, saying on cnn last night the bill still needs a complete overhaul. Senate leaders have said they expect a new version later this week and a vote as early as next week the white house says it remains confident in the changes made, but Vice President mike pence, who has been attending these senate lunches, said yesterday on satellite radio that if they cant get it done this time, joe and michelle, that they ought to just repeal it outright and work on a replacement later yeah, weve heard that before lets see if they finally do that thanks, kayla. Kayla tausche. Good nevada pronouncer, kayla. Good thank you. Thank you. I think i learned that one the hard way multiple times. Thank you oregon. Its oregon, right im just trying to stand up for the people that live there that know that it is nevada. Its not for me. But you know, thank you. Excellent. Are you going to talk about this email when are you going are you coming back to talk about this thing . What do you want to know about the email, joe . Im wondering i want to know what it means i want to know youre talking about the Donald Trump Jr. Yeah, Donald Trump Jr i thought it through, kayla, and in terms of collusion, i think it represents a dot, that if there are subsequent dots that you can then connect, it could lead to Something Like that, but im not sure it is yet thats im not sure how else to think about it, you know what i mean well, im not sure how anyone who hasnt seen the email can really think about it. The New York Times reported, according to three sources who had knowledge of that email that you referenced, that Donald Trump Jr. , the president s son, was aware of the motivation in brokering a meeting with a russian and kremlinconnected attorney. Right. Apparently, he was told that that attorney would have research that was contributing to a Russian Campaign to help donald trump get elected. Its some pr guy, like some local correct. Pr guy who said it so, i dont even know if id believe in it. I was thinking about that dossier that trump, in the hotel or something if someone offered that to the clinton campaign, i mean, to say, okay, im listening, to say im listening, what have you got, i dont know when that becomes collusion, you know what i mean well, i dont think its really for anyone at this point, joe, to say, except for bob mueller, whos going to be the one whos taking the lead on this you know, there have been some split not to say that people on other networks arent going to say but believe me i was just going to say that. Someones already saying that somewhere. Now theres this conversation about what is normal protocol on a campaign yesterday, Sarah Huckabee sanders, who, of course, has run multiple campaigns for her father and for others, she said that, you know, she had tons of meetings where the m. O. Of the meeting was for Opposition Research, but then you had others like Nicolle Wallace and matthew dowd, who are each republican strategists they were saying, yes, we did Opposition Research as well, but never at the behest of a foreign adversary. An adversary, right. That seems to be the gray area that people are going to be picking apart here. All right, nevada nevada im focused on that still. Oregon. Oregon. Illinois no wait okay, i got it how do you say louisville . Like that. Louisville. Im from georgia, so i knew that one. You are you knew good you get extra credit for that. Thanks lets get back to the broader markets. Joining us now, michael tyler, chief Investment Officer eastern bank wealth management, our guest host ed keon, managing director at qma. Just start with you, because im trying to figure out in a synopsis what youve been saying recently, because youre a longtime bull, but youve tempered your enthusiasm in the last year or so and the markets continue to go higher, but would i call you i hate to say it, but cautiously optimistic all through this yeah. So i thought at the beginning of the year wed get 8 to 10 returns this year and were already seeing 10 . Halfway through the year. And were only halfway through the year, so i think the up side is somewhat limiting Earnings Growth has been terrific, granted, but it looks like there might be some signs that it might be a little slower than the First Quarter second quarter, consensus is about 8 well probably do 10 , because we always beat that. A lot of that is driven by the Energy Earnings and rebound as a result of Energy Prices being higher than this time last year. In the broader economy, theres been a lot of disappointing Economic Data where things have fallen short of expectations, even though the jobs report was great. And its long in the economic cycle. This is getting to be seventh, eighth, maybe even the beginning of the ninth inning, so i think a little bit of caution here is warranted, given that stocks are selling for pretty high valuations. Youve kind of been saying that for a year. Yeah. Well, if i move to a more defensive stance around march or so, so about the last threefour months. Thats it so, you were bullish from november on . Yeah. Okay. Michael, you are i would say a lot of people are echoing what both you and ed have said, the market might be a little bit overvalued, but dont sell here. And maybe i think in your view, you need to just switch to some different sectors that stay long is that right . Yeah, weve done exactly right. Weve done a little bit of rotation, but not a lot. Weve pulled a little bit of money, taking profits out of technology, which has done very well, put it into some sectors that havent done as well, such as health care and some Consumer Staples companies. So, that parts going fine but lets face it, breadth is really good. Where the techs have begun to slow down, the financials have picked up. The overall market is tracking along fine the earnings are looking good. Pepsi is not the First Company i think there will be others that beat. Weve had, frankly, very few profit warnings for the second quarter, much fewer than usual, which bodes well for the earnings season. And i think that, yeah, well have slightly slower earnings than in the First Quarter, but lets face it, theres less of a tailwind from oil prices compared to a year ago so thats not disturbing either. I think that while i wouldnt be quite as bullish as i was six months ago, simply because stocks are up, i think we continue to ride for a while what about Interest Rates, which once again are backing up again today that took a breather yesterday . At what point do you start to get worried . And were only still talking about maybe approaching 2. 4 on the tenyear, but if you the higher they go, the more competition that provides the stocks. Thats right. I think the market is starting to price in a more aggressive monetary stance among the fed and also among central bankers around the world so i dont think that rates are going to go tremendously higher from here, especially since eventually we will have another recession. Im not predicting we will soon, but as we get into 2018 or 2019, based on historical standards, with the economy maybe slowing a little bit and the fed raising rates, unless we get some pro growth policies, i would expect tax reform, et cetera. Correct i would expect that we would see a pullback at some point over the next few years. Why, ed, when you talk the eighth and ninth inning, do you think the stock market reacts to the Business Cycle i think it d