Shanghai up. Early trading in europe, modest advances across the board. Cac is up. If you look at crude oil, last week was big for oil up 4 for the week, in spitting distance of 50. Up to 49. 78 a barrel. Corporate news the big one, Charter Communications announced it is not interested, i repeat, not interested in buying wireless carrier sprint follows news friday that sprint was interested in merging with charter to create a media outlet controlled we understand why a deal is attractive for softbank. Could kill any chance of deal between the companies. The wall street journal saying the ceo could make a formal offer anyway take a look at shares of sprint. Put context around whats going on sprint up close to 6 . Charter up marginally as well. Surprising sprint is where it is sprint had been talking back and forth to t mobile. Thats been the natural partner. T mobile effectively spurned sprint and sprint has gone on this sort of merger talk spree with anybody who will listen surprising to see it up more than 5 , even though charter says good for them. That part is surprising whats going on, youve been hearing chatter about sprint Warren Buffetts name was raised as somebody, any name they could put out there, all in part i would contend to bring t mobile back to the table. Well see whether in fact something happens here a busy week for earnings as joe mentioned, Economic Data coming up on the agenda. Today we get chicago pmi, pending home sales tomorrow, personal income, ism manufacturing index, july auto sales. Wednesday look for the adp employment report. Thursday, ism Services Index and factory orders, topped off by the july jobs report friday morning. On the earnings front, about 120 Companies Reporting in the s p 500 this week, big names, pfizer, apple, aig, tesla. Viacom in political news, day one for the new white house chief of staff, john kelly. Good morning. The new chief of staff has a full plate after a weekend characterized characterized by threats President Trump and shinzo abe talk about a grave and growing threat from north korea following a missile test with longer capabilities, this time with the potential to reach new york or chicago. The u. S. Responding with show of force, fly over of the Korean Peninsula that took place over the weekend. Pacific air force commander in a statement saying diplomacy remains the lead, however, we have a responsibility to our allies and our nation to showcase our unwavering commitment while planning for the worst case scenario. Domestically, the president threatening congress and insurers in a series of tweets after failed votes in the senate, calling republicans quitters and saying the white house will not pay benefits for lawmakers or subsidies for insurers that the president called bailouts. The white house is expected to make decision on those reimbursements this week secretary price when asked about them was noncommittal. That the court made a decision that those payments were made illegally. Thats working its way through the court system, and it will. But again, what the president wants us to appreciate and wants everybody across this land to appreciate is that the system is being propped up in a way that makes it so it is not working for people the white house hammers health care, tuesday Small Business event at the white house could serve as a venue t start selling tax reform as you mention, the cabinet will see a fresh face President Trumps new chief of staff, general john kelly will begin that role today. An attempt to regain footing and reset the agenda Going Forward back to you. Lot of people are talking about the role of chief of staff, what to expect and what to expect with this president who does have his own way of doing things. Well, the chief of staff is generally exactly as it sounds, the chief of staff, but there are some questions about the effectiveness of Reince Priebus and the respect that other officials internally have for him because very few people ended up reporting to Reince Priebus. Secretary kelly, call him secretary kelly, he is the outgoing Homeland Security secretary, but general kelly is said to be asking for everybody to report up to him and is trying to consolidate some of the Power Centers within the white house, but well see how it plays out in reality versus in theory. Already working just called him general kelly. Like i dont know. I think i would probably ask him if i was going to do something, general, sir anyway, interesting to watch how do we know, it is like monday whats going to happen this week have you thought about that . If you think about last week and what happened. News cycle and all the things. On the cusp of another week. Many republican strategists called last week the worst week of the administration. Not for us. For who . Not for people watching in the news business. But in terms of terrible for the country. To have sandra, dont get dramatic anyway, kayla, thank you i wasnt trying to start anything look at the the wall street journal headlines trump deepens gop divide fuels frustration in his party why are you not thinking this is a terrible week . Relatively horrific week for everybody. New york times has elites on both sides dont like trump elites on the republican side, bill crystal, all the elites, i didnt know you would be in an off mood today the situation concerns me greatly. John kelly is an up tick. Getting new blood to get a more orderly reporting. Being head of Homeland Security made me feel a little safe north korea is a huge situation. You have in geopolitical news Vladimir Putin saying russia is expelling 755 americans from diplomatic staff in the country, could impose measures in the future this comes as the president is ready to sign sanctions against russia passed by congress. State department calls the decision to cut hundreds from diplomatic staff regrettable, uncalled for act. Maybe worse if we were in venezuela. I might be more concerned. Following a developing story out of venezuela protests turned violent in the wake of that election. President maduro pressed ahead with a vote to create a constitutional super body to rewrite their charter, despite threat of further u. S. Sanctions and months of opposition protests opponents say it gives him the power to rewrite the countrys constitution there are so many questions about what happened with the vote that outsiders say probably half the yes votes were legitimate yes, leading to all sorts of things they say the vast majority of venezuelans would not be in favor. Hsbc Second Quarter profit rose 57 the bank says it continues to see benefits from a turnaround plan that it launched for 2015 announcing 2 billion stock buy back heineken reporting better than expected results for the first half of the year strong Profit Growth in europe, thanks to a late easter holiday, early start to warm summer weather. And sanofi, french drug maker reports strong sales growth in Consumer Health and vaccine divisions. I would think the failure of Health Care Puts you in a great mood the democrats are taking self east, celebrating. It was a great week for health care how about the markets . Lets take a look at the markets this morning again as we see positive numbers almost every morning. It is jobs week. Were going to look at the broader markets now. But a series of new highs again, 20 since the election head of investment strategy, how are the earnings werent earnings pretty good last week . Really good isnt that something . We have 6 top line growth, double digit Earnings Growth doesnt seem to matter whats going on in washington it is like the second year in arow of seeing double digit Earnings Growth. We emerged out of earnings recession about a year ago and indeed, this type of Earnings Growth is more than enough to support current valuations level thats not something that everyone thinks right now. Well, people are nervous, theres been a bit of a narrow lead to the Market Technology up over 20 for the year but Earnings Growth is across the board. And of course it is important to look not just in the u. S. But outside the u. S. Revenue growth has been good, too, better than recent years. Thats right. I think thats the more important number earnings can be quite cyclical top line growth is more longer term signal to what earnings will be Going Forward in the future. Tells you the economy is doing well now we had blockbuster Consumer Confidence 121 on Consumer Confidence consumers are pretty happy as well. Weak dollar means revenue can only get better. Thats right. The weakness of the dollar is not enough to derail outside the u. S. Then theres opportunity in developed markets in dick as priced at a 50 discount to the u. S. Much of that performance came from weakness of the dollar. In local currency terms, still have relatively attractive valuation. So the market in terms of north korea, i guess its the black swan that everything would be effected if something really awful happened even casually not helping that much does the market know anything or the market is wait and see if youre thinking about black swans or Something Like north korea, the only thing thats going to work in that scenario are super Long Duration bonds. Zero coupon bonds will make money if theres derailment of the geopolitical situation but thats such a black swan, it is a risk not worth taking is it a zero percent chance he would try to launch a Nuclear War Head or lets say it is a onehundredth chance, i can see the market go down 50 if that happens. Yeah. The market either doesnt believe thats a real possibility or burying our head in the sand. I dont think you can price it in. I should say two things might work in that scenario. Zero coupon bonds nothing is going to work. Cash might not even be good. Depends on volatility going to pay off the puts i dont know, it is something i dont think we can fathom. Maybe thats why the market doesnt consider the possibility at this point. You would have to do exotic options. It is not that nobody calculates, it is such a by narrow situation, if it happens all over the world, only happens once cash wont help. We could be preppers. I heard from a Hedge Fund Way theres a way to hedge against buying south korean companies, sounds complicated for most of us you can always factor out the worst case scenario. In worse case scenario, you would have shorted samsung years ago, right smart thing to do, but would have been a terrible thing to do, a dumb thing to do ultimately if youve seen what happened to samsung. We have nine and a half of ten indicators looking bullish to take the risk of north korea becoming much more volatile than it is is a tough thing not just north korea, the relationship with china is fraying, potential for trade sanctions to come as a result, our relationship with russia is fraying, heard people the worst we have seen since the cold war. Does that matter i think that volatility is likely to tick up a bit, even in the absence of black swans coming to fruition the notion we can have the vix below ten for a protracted period of time is unlikely even modest upparticultick in vy is likely to ensue in the next it year. Thank you see you in the near future when we come back, snaps first lock up expiration is today. They can sell shares the First Time Since the ipo, could be a sell signal for a stock under pressure mark ma haney will join us next to talk about it are you ok . What happened . Dad kinda walked into my swing. Huh . Dont you mean dad kind of ruined our hawaii fund . I thud go to the thothpital. There goes the airfair. I dont think Health Insurance will cover all. Of that. Buth my fathe without that cash from aflac we might have to choose between hawaii or your face. Hawaii what . Haha. Hawaii you might have less coverage than you think. Visit aflac. Com and keep your lifestyle healthy. Aflac who knew that phones would starentertaining us,ng . Getting us back on track and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save when you choose by the gig or unlimited. Call or go to xfinitymobile. Com. Xfinity mobile. Its a new kind of network, designed to save you money. Looking for a come back. The ousted uner ceo says he is Steve Jobsing it, hopes to return to lead the company again. Always felt this may be the case i think. I just dont see how people write him off easily, he is not a ceo brought in to run the place, he is a major owner, biggest shareholder. I dont think he gets brushed off so quickly. Kalanick resigned from his position in june, referencing apple founder who was fired and later returned after meg whitman declined to be considered for the ceo job, the search is down to all male ceos, one is a person of color also a piece in New York Times that said that the second they heard meg was out, a board member they showed the reporter the Text Messages and it was a board member . Board member seemed to show the reporter what the Text Messages from the Board Members were back when they they all learned about it from meg whitman tweeting about it. Not because she apparently called she was the horse they were betting on early investors and employees and insiders at snap, Parent Company snap chat can sell shares the First Time Since the ipo. It is expected to put pressure on that stock. Plunge below debut price now down to 1349 you remember the original ipo price was 17. Joining us to talk about it, mark mahaney is this a buy on the dip situation or is there more room to go down, sir . Well, this lock up, you always have selling pressure going into it. My guess is this helped find a floor on stock you have earnings coming up, big indicator what happens with the stock. We like the shares, estimates havent changed much, still like it, have a 31 price target and are sticking with it is that a turnaround, the stock will turnaround after we hear the Earnings Report is that the trigger . Whats going on here there are two catalysts on the stock. First is just like with twitter, users matter most. It is daily average users. They need reacceleration we think theyll get that end of this year, beginning of next year in part as they fix the android integration problems theyve had. And they continue to roll out new features thats point one required for the stock to move. Second, they rolled out Self Service Advertising solution, need that to stabilize ad Revenue Growth one of those two factors is the catalyst behind the stock. Lot of people worry about the competition, namely facebook you look at the numbers they have, does that give you more hope or less for snap . Its the single biggest risk group since we initiated on the company. It is going to be because facebook and instagram have enough innovation, come up with their own innovative features that it undermines growth, we like ongoing productivity and innovation, snap maps was one of the more interesting features in the space for awhile they have to continue to do that if they do, this team has a pretty good track record shares should work wroyoure expecting stock too up, what do you think the true down side is i dont think we are far from it let me throw out numbers the stock is trading ten times sales. High multiple, but twitter is growing five to six time sales and its revenues are declining facebook also trades close to ten time sales with 50 growth i think theres a lot of valuation support for the stock here glad you brought up twitter bar ons had a story on twitter over the weekend could be on way to hat size, because of comparisons you compare twitter to facebook, facebook is growing, twitter is struggling how do you see twitter now we continue to have a sell on twitter. The market is assuming that Revenue Growth there, they can recover to Revenue Growth. Regain that momentum and not only that, has to be decent growth, talking 10 to 20 at least implied with that kind of price to sales multiple, thats a hard thing for this company to pull off. Advertisers, surveys, both come back to us looking for those things to turn if we dont, theyll turn their term stock remains under pressure that stock continues to fall, 14 is the price target with twitter. What do you think happens to that company, need to get bought. I think thats a reasonable outcome, but thats many years out. I think thats a scenario that three, four, five years out before acquisition occurs, and if it did, would probably occur with a yahoo multiple, five, six, seven times cash flow, not sales, and thats a much lower price than today. Appreciate it very much hear youre on a cell phone this morning. And it is working. What service is that, given we were talking about sprint . Verizon all is good. Very good mark, appreciate it. See you soon thanks. Sprint hired that guy they cant do any better than that hes everywhere. Again, it is like can you imagine being that guy wherefore the last ten years, hasnt had to do anything first it was verizon, now it is sprint seriously. I mean, thats this guys job cant find anything else coming up, big changes and new challenges for the white house north korea is testing a long range missile that could hit major u. S.