Economicists and central bankers is the entire focus for one day. Decided to make it wonky and focus on the labor market. I would be quite nervous, the financial markets, for the next 90 minutes because the world and the dog thinks she will be dovish, push the time line back for raising rates, keep it back so we surpass 2,000 on the s p 500. Thats what the markets positioned, what will happen, and it makes me nervous. 28 record closes, up 14, amazing statistic. The market climbs a wall of worry. Its a belief the central bank is there for you, basically. A wall of worry. Thats been the belief for a period of time, and theres those who blame rises in all Asset Classes are starting signs of speculation. You got reits per yield, and yellen does, as you suppose she may, strike a dovish tone, simon concern she wont, but that is the market belief she will strike dovish. We have draghi and whats going on in europe. We do. As put yesterday, of course, dissented from the fomc in july, but the fed is running a risky policy and is not reacting to the change in the data, and shes choosing to talk solely about the labor market. Maybe this is a smoke screen for the mandate of the market, but what they work out, how they exit these huge positions that they have without actually causing financial upset, which is a clear possibility. Did you see, now, 1 trillion of corporate debt has been sold again in this country, this year, at super low Interest Rates. And it is the fuel of whats going on of cheap rates of borrowing, no doubt, talking about m a and see it today, a deal like one thats not going to get a lot of headlines, but borrowing significantly to get units from duke energy this morning. That is, again, a deal occurring because of extraordinary low rates of borrowing and willingness to bridge and the junk market is unbelievele. Will they invest in businesses in terms of capital expenditures, and we are seeing a little bit, but not the levels in the healthier economy. The other question, i think, with the Federal Reserve is the other members, hawks of the fed, speak out louder as they do in opposition to the core of the fed about why now might be the time to start thinking about policy normalization. You mentioned charlie of the philadelphia fed, we heard from jim on squawk box earlier talking about how he says the markets in the economy would be okay for the Federal Reserve to start moving towards the conversation. I suspect she doesnt have to speak for the entire fomc, just her as chair and as an individual and reflect the academic discussion where we are in labor markets, but people think theres little more they can do with super low, super accommodative Monetary Policy. It will not shift the picture that much. Shift the markets . The jackson hole speech comes a day after it hit record intraday and closing high. The index within eight points of the 2,000 mark. We have the Pnc Financial services, and brian, the chief investment strategist with demo capital markets. Brian, i know everybodys looking to yellen at 10 00, but, for me, mario draghi in the 2 00 hour is more interesting, scoped to do something in the economy. Well, we think so as well. I mean, europe has been a dramatic underperformer after a big snap back, low quality rally last year, and people thought that europe and emerging markets could come back this year. Bottom line is what investors are telling you is that america remains not only the stable asset, but the one that is growing as well. However, we are teetering on the break of a pause. We have to pause at some point. Markets are stretched from our near term and longer term, as yo know, remain bullish, but we would love to echo mr. Hobbs comments this morning. The market is too bullish right now, and depending on the fed, the near term basis and dissension increases on the fed, thats noise investors have to deal with in a still very macrooriented market. The market has depend on growth and sales growth and things like that. We think thats Fourth Quarter into 2015 type story. Are you saying its a buy the rumor, sell the fact with the yellen speech today . We think so, especially begin the fact our targets at 19 00 for year end, and the markets go higher, everyone raises their target. We maintain 1900 target all yearlong. We think the Fourth Quarter could be bumpier than people think and surprised how strong the markets been on this dip in august, but now everyones counting on seasonality to be strong in the fall where it was stronger in the summer time. You cant have it both ways. Stocks can be bumpy on the near term basis. Its legitimate for the chair to talk about the labor market, part of the mandate, wholly legitimate today, but is she being naive creating oneway risk in the market, the market believing it can chase a dovish yellen or the bond market able to rally and her pushing timelines where we get a repricing pushing timelines further and further back. Well, i dont think shes being naive at all or push it back. I think youll hear more of what you hear from her in the testimony back in july. Shes looking at a dash board of different indicators of the job market, wages is certainly part of that, and theres been improvement. Theres been improvement in the hiring rate. Its going up. The number of job openings are up. You might hear her talk a little bit about that, but wont set new policies. She will be speaking for herself, and i dont think shell try to push back timing and probably going to reaffirm that qe will end in november, and, yes, itll be sometime, very much data dependent on when the fedes moves the fund rate hike. The point i make here, if she comes along and says, look, i think low Interest Rates can do more for the market, said in isolation, if thats the central message, people will not concentrate the fact they are intending to raise rates any time soon with the absence of other commentary, surely. Thats what i mean by pushing the timelines back by default. I dont think shell say anything directly about the market. Shell talk about the economy. If the earnings are good, and we saw earnings surprised now in the Second Quarter and the economy was stronger as we thought it would be, so i dont think shes trying to speak to the markets. I think shes trying to speak to the economy, trying to speak to markets to average individuals, and i dont think the message is market centric, and its going to be a lot of progress has been made, but more needs to be made, and i think the real issue, and jim talk about it, is how much slack is there in the job market . Is it significant as the feds statement said, or is it less, and i dont think youre going to hear her say anything difrt than what was in the statement. Significant slack in the job market. Theres a lot of talk of slack. Much more so than a year ago. Slack is the word of 2014 i think. The debate from the investers stand point shifted. What is more important, the timing of the first rate hike or scope of what happens after that . The pace of the hiking cycle. Scope and overall trend, sarah, especially given the fact that earnings have been good, sales growth coming back, americas proven from a fundamental perspective business and cap x increases through this and jobs come back to north ameri america. Its how hard they crank it up. The message is trying to be as simple and easy as possible. Caught between a rock and hard place, frankly, because the data is saying that things are heating up more, but she has to be simple and calm for the markets. Its ridiculous a. The end of the day, its a good thing when rates go up baa the economy is improving and should act appropriately being positive. Thats what fuels the bull market. I totally agree with that, that its good news when the fed raises rates. Its good news they will end quantitative easing, a sign of confidence for the economy, and it will be the economy doing better, the drive is better, labor numbers, and ultimately drive the fed to begin with the normalization process, and, of course, its not the first rate hike thats important, by its the pace of those pay hikes thereafter. Right. We have not got much on that yet. They said it will be measured. Yeah, all right, well, thanks, guys, an ongoing debate. Thank you. Good to see you both. Okay. Lets move on to corporate news, specifically retail. The gap reported Second Quarter earns of 70 cents a share, beating wall streets forecast and raise the the full year profit guidance, but aeropostal, a down beat outlook posting a 46 cents loss, the result days after the Company Announced a change in ceos, bringing back a former ceo there, aeropostal blames, guys, the store traffic. Look at the detail of the average sale price is good, but cant get the store traffic, it say, anding iffing a worst result in the backtoschool quarter as well. No good news from aeropostal. I looked at the gap release, twam. If you divide it up, its different stories. They have Banana Republic and old navy. Old navy is the bright spot for sales, 4 growth, 5 decline at gap, the mainstay. Theyll open 40 new stores in india, expansion into india. With a partner so they reduce cost. I dont know what you think about old navy. They put the athletic wear, i believe, in old navy, a hot seller, denim, which gap relies upon, the name sake brand is there, being one of our fashion beat reporters. Yes. That is not something ive ever done, but thank you for that. They benefitted greatly, of course, from merchandising better, gap, over a long period of time now after what had been some terrible years, but that seems to have reached its peak. You have to keep refreshing. Old navy, man, that stuff is cheap. Ill tell you that. Cheap, but fashionable. Ive been there recently. Wearing old navy . It would keep our budget low. 5 flipflops. A pair of shorts for 15. Probably cold, though as the weather changes. Board shorts, remember that . Gap was going to refresh by september 1st in time for fall and align that with the merchandising, so the ceo raised the enthusiasm level with that. Working on her on as you know. Exactly. Interested to see. All right, more retail news coming up, and hear what the man home depot chose to be next ceo is saying about the retailers future. There he is. Look at futures again. Were poised for a lower opening there on the broader averages. More squawk on the street live from post nine when we return. World markets are waiting for events in jackson hole today. Yelp, of course, in 45 minutes time giving a keynote address on the labor market and further indication as to where were going on Monetary Policy at the fed. A lot of controversy and wonkiness. We are waiting for yellen to emerge. I think its not raining there, so chances are shell emerge for the cameras shortly and bring it to you live. In advance, of course, speaking at 10 00 a. M. , and well have details of that speech then and there at 10 00 curtesy of steve, who is currently in a locked room. Whats followunny, ive bee there, the Jackson Lakes lodge. You are looking at the patio outside the dining room, the conference room, and ceremony, the chair comes out, does a wave, funny, almost red carpet moment of jackson hole. Thats what were showing you, and, of course, well bring that to you. A central bank cat walk. Exactly. Maybe shell wave to the camera. The companys president of u. S. Retail will become the ceo in november, succeeding frank blake who spent seven years on the top job and will remain chairman. This month on closing bell, kelly spoke to him and he told her what he sees ahead for home depot. The future, i think, is incredibly bright for the home depot. We look at the interconnected retail world as a Growth Opportunity for us. If you think about 2013, our company grew 5 billion in total, and about 900 million of that came through homedepot. Com in our retail opportunities. I think as you look forward in the future, thats really an enormous opportunity for the home depot and its shareholders. And you guys remember that home depot reported earnings this week, a strong quarter, and mr. Blake is leaving at a time where he seems to be riding high. Analysts said execution is key. The stock price will be better. Blake is lauded for his leadership taking over the company at a time when the company was not doing extraordinary well. Hes staying on as chairman, and thats important to point out. Sure. But youre right, even the last quarter was reflective, at least, of what many say has been a new home depot under mr. Blake and leadership over the last number of years. Going over the notes this morning seeing what the commentary is on the new ceo. Piper says while blake has been, only, a big success and tied to the key initiatives since turning around the company, hes been tied to successfulness, and they are optimistic. Shouldnt be a difficult transition. Its not difficult transition. But an important one. Moving on to sales this morning as well. The company reporting and raising its full year forecast reporting profit of 13 cents a share, ahead of wall streets estimates. Revenue above consensus helped by strong sales of the cloud based software. Heres what the ceo told jim cramer last night on mad money. Weve crossed the 5 billion revenue rend rate as well. I dont think theres a company that grew at 38 rend rate before, and thats why salesforce. Com is so excited today. Yeah, 38 revenue growth, and everything across the board growing at 30 . Well see how the stock reacts today. It is looking, as you see, up a bit. Up a bit. Cram cramer certainly a big fan. Interesting comments, acquisiti acquisition, 319. He atepds regularly a dinner with a strong emerging company, and two looked me in the eye, and said this never happened before, you really need to buy rene, described as salesforce. Com on steroids. Said that on the call. They did a number of acquisitions to build up the profile. Thats the key strategy. I like how he paid more than what was worth. Depends how you integrate it and what you do with it. Up next, wall street, veteran art cashin, and counting down to the opening bell and more specifically, janet yellen speaking in 45 minutes time. Its live here, the commentary at least, on cnbc. We believe g the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. Eight minutes before we trade at the floor of the new york stock exchange, 28 minutes, of course, until we hear. 38 minutes until we hear from yellen. Good morning, art. How is the market positioned for yell yellen . The rise over the two days was Short Covering, people wanted to reduce risk. Those who were short, its been a painful experience coming into this, so i would tend to lean with you that, if anything, there may be a 64 40 risk she disappoints because standards are high here. By disappointing, you mean not being super dovish . Not offering an openended promise to remain low forever. I think the viewers should realize we may get another shoot to fall if we hear from draghi later. That could be equally important given the state of where europe is and how difficult it is for them to do the equivalent of qe3. Im imagining this is what you think, people think qe is a possibility, but may say, no, i have to wait for the existing package to work its way through, we have to go through the stress test of the european bank, and now is not the time. I think not only now is not the time, but hell have structural problems, and, quite frankly, what good would qe do . I mean, you got the 10year bund at 1 , where do you move to . Weaken the euro further, they could use that, and the euro finally moved down a little. Stocks, august shaping up to be the second best month of the year behind february. Started out rocky. Is it just the Federal Reserves expectations . Are we overplaying that too much . The Economic Data has been pretty solid, and earnings have been better than expected including revenue growth. No, Economic Data has been good, and we began the month with a whole set of pressing o geopolitical fears and problems, and they diminished somewhat. We were hoping we wouldnt have to worry about the ukraine until tuesday when putin has a meeting, but as we saw overnight, the convoy moved in, and markets got nervous, calmed again somewhat, and yellen is back to center stage. Just to highlight that. The russian trucks broke through the Ukrainian Border without red cross escort, and still were flat on futures. Appears not to matter to this market at the moment. Well, it doesnt matter quite as much because recall last friday, we had a big case of the boy who cried wolf, and everybody thought that there was an take on a convoy, which, apparently, never really happened. Oh, really . Well, did you see the wreckage . If i were ukraine, rush a to bring a photo of the destruction i brought on my russian foe. Okay. The talk is that the talk is that yellen could push us past 2,000 on the s p. How likely do you think that is, what is the redistense on the last fewpoints . Well, its more psychological than anything else. You have dont past the point of an easy count here. As i say, i think that they have such high hopes for her, they may have a situation where this 60 40 chance disappoints. Well see you later in the show. Opening bell moments away, stick with us on squawk on the street. In india we have 400 Million People who dont have electricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. The ibm cloud is the cloud for business. 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