No funk for the consumer. Targeted at 6 billion, snap chat with 0 billion in revenue, raising a new height this morning. Facebooks first downgrade since march of this year, and the growth will slow in 2015. For the first time, the targets open with the s p above 2,000 coming off the 30th record close of the year and dow hit new intraday highs in tuesday session, and nasdaq at a fresh 14 and a half year high, up 4. 5 . Interesting action so far. We have a cease fire in gaza, meeting how the geopolitical story reversed and markets like that. Lack of news is good news for the market. The bullish momentum continues. Milestone after milestone, but momentum is a keyword to talk about and whether it continues the 30th record close for stocks . The action is in the currency market. Overnight, the year row hit the lowest level in a year, ramped up hopes, right, simon, for more action and weak Economic Data fuelling the fire. I think one. Most interesting barometers this morning is the major right on where the markets are for the Financial Times and the wall street journal takes the same path, where we are at a thousand and people are conflicted. People want to be in the market, fear they would miss out, and at the same time, they are worried its under pinned. They should do more or less exactly the same thing. Interesting to not the sentiment. We talk about a lull of worry. You mention concerns, and people are worried about the 4 Economic Growth, whether thats sustainable. Yes, we have Consumer Confidence at a 2007 high yesterday, you we saw it before, the start of the recovery and the overseas concerns. And also, i mean, most importantly, two brutal bear markets. You gained a thousand and then were bought back twice meaning the average return each year is just over 6 . People are mindful of being burned so badly, obviously. With more on this, we have two on set to discuss, steve wood at russell investment, and chad morganlander, portfolio manager. What about this day after day and record after record, will we will propelled to the summer . Youll see higher highs and lower lows, so look for at 5 to 7 in the s p year end. This is on the back of better than expected Economic Growth 5 to 7 on top of an already 8 growth . Sure. Youll see better than expected numbers from the United States, and youll see earnings better than expected, not only on the profit margin side, but also on top line, and get this, you are going to see Central Bank Intervention by the ecb. Thats going to gin up all markets zblp what why do you have a crystal ball that says earnings are better than expected, and growth will be getter than expected . I think credit expands here in the United States. Business investment also is going to get better over the course of the next six months from the preers six months. Weve been promised that for 18 months now. And now you are seeing it in the earnings numbers last quarter, better than expected. Hey, look, i used to be bearish because i thought credit was going to be, you know, was not functioning well or getting into the real economy, but you are starting to see that. Now, were not out of the woods yet. We do have an unemployment rate, under employment rate, which is somewhat higher than the 30year average. You do is other issues on the economy, but were starting to slowly improve. Watch, im telling you, watch the Central Bank Intervention by the ecb. That will propel markets higher overseas as well as youre going to get the euro below 130. That phrase, i used to be bearish, thats what people are looking for, right . Conversion of people from pessimism to optimism, but youre not there yet, or are you . We are where we forecasted the market to be. That year end makes sense. If youre up, the russell 1,000 up 9 , action in small caps, russell 2 up 1. 5 in the last couple days. Its a broe broadening market a theres a lot of chop. Its range for u. S. Equities. There could be stuff coming out in a year, and i think draghi is, what, six years late and 3 trillion sthorhort, but the eurn central bank has to get short. Theres a lot of sovereign debt in europe, a lot of opportunities there, a Stock Selection market, security by security in fixed and equity space. Its a security selection market. Pointing out banks like jpmori gap and Deutsche Bank suggestings theres a private qe next week in europe. Do you not find symmetry in that that things are so bad in europe that europe is stalling as the major economy in the world that the central bank has to apgt, but dont worry because the stock market will rally on that, even though things are bad, draghi had to move. Gooz news is bad news. It was sick languishing, and the doctors are now going to treat it, it being draghi. Inflate assets . Doesnt mean underpinning is good. Means the medicine, the stimulus from the European Central bank will have winners, medium and longer term losers, but beneficiaries to the policy. What will be interesting is the qe in europe will be less straightforward. In the United States they cant find assets to buy. Exactly. In the United States, if the fed wants qe, they buy bonds and u. S. Debt. Its tricky. The tenyear is below 240. Again, chad, you paint a rosy picture of the economy. Why is the u. S. Trashily bond market not responding to the positive data in the way you think it would . Competing, germany and japan at 1 . Spanish debt at 240, and 18 months ago, the world was going to implode over there. What happens to tenyear . Looks like a bargain, right . You ask anyone on the street who is buying german debt, and, oh, were not buying it, but people are. We believe theres a sovereign debt bubble on the peripheral side which will have its time where its going to implode. It will be a matter of time. Over the course of the next six months, we dont believe it will happen, you want to be in risk assets. Is there a return . Im assuming volume goes up in september from august. These people come back from vacation, do they look at the summer and say, wow, i missed out, i better catch up . Or this is well, ill ease out of the market . Yeah, this has to be one of the least loved if not thee least loved bull markets in five and a half years. Solid returns. We think theres a security selection, looking globally, multiasset strategies, they are global in nature. Disinflation and deflation is priced in in europe. In the u. S. , you have a healthy debate. The u. S. Is managing a recovery and managing the taper in the qe exit, but dr. Yellen is the voice that matters the most looking at slack in labor markets, slack in wages, slacks in the economy, so its going to be a little bit longer in tell us than whats priced in now. Comes faster and more aggressively than the ecb and bank of japan which is why the Dollar Strength ps. Bottom line is can this equity market sustain a world of higher Interest Rates or at least starting to price that in . I dont think so. For the time being until you see the 10year go above 3 . You have an armageddon scenario down the line. Sovereign debt collapses and theres a rush for the exits. There could be when spanish debt moves higher, the markets, equity markets dont be delusional about it will trade off. That does not mean the u. S. Economys derailed or earnings over the long run three to five years from now. A bubble bursting on sovereign debt, and you dont think the u. S. Economy will be impacted . No, i dont think the u. S. Is impacted by that. Wow. If the spanish debt goes from 2 to 5 , does it matter to people in the United States or the economy . The answer is absolutely not. Youre a fear monger today. Today . Today. Delusional. Its okay. Back to him what he said, he was the one who said there was a sovereign debt bubble that would burst. The implications of the statement are vast. Fixed income is a lot too. Its not just sovereign debt. Theres current strategies, and when you look at global credit, theres a lot to be done to generate value. Guys, we have to leave it there. Focus on the positive today because well continue the record run. Chad, steven, good to see you both. Thank you. Tiffany reporting up to 96 cents a share beating estimates. The retailer sees a higher growth margin and 7 increase in worldwide net sales, particularly in the americas and Asian Pacific regions suffering decline in japan. Well talk about this a number of times during the course of the morning. Whats interesting is gross margin element whether the ceo is selling more product at lower price points. This is atlas jewelry range. Fashion jewelry. With a higher margin, lower price points that are giving us better than expected earnings. Yeah, margins up, american comps up 8. Not bad. Europe is the question in the Conference Call right now. Europe comps, i think, down softer than expected, down 8 on a Constant Currency basis. Asian pacific was strong. Is luxury back . Kors trading up . Tiffany is a troubled name for a long time. Tiffanys in the rejuvenation phase at the moment. Notably, you got a new ceo about to take over, and, also, its interesting that you have a new female head of design, been there a year, and now they are beginning to put it out there to tell the story. In fact, theres a huge article in elle magazine. Well talk about that later. Oliver chen with an eye for style, a lot of thoughts on the new design chief, important for tiffanys. I like the good Global Barometer for luxury spending and the pieces came together in the quarter other than japan, a notable weak spot. Which we know. After the consumption tax hike. The facebook downgrade, a contraryian call going to neutral on facebook, one of the first down grades for the stock in a very long time. When we come back, though, this morning, a lot more squawk on the street sarahs exclusive with u william lauder, stock at an alltime high, and one more look at the premarket today starting the morning above 2,000 for the first time. A lot more squawk on the street live from post nine in just a moment. [ woman ] the cadillac summer collection is here. [ male announcer ] during the cadillac summers best event, lease this 2014 ats for around 299 a month. Hurry in this exceptional offer ends soon. Sources say that providers square is worth 6 billion on rising capital. Square led by the twitter founder. It was valued at 5 billion this year, and snap chap, per kips investing in the company at valuation of close to 10 billion. Snap chat turned down a 3 billion takeover bid from facebook in the year. Journal says perkins 20 million for less than 1 . People laughed at snap chat at three, and now theyll see 10 billion. Hard to value the companies. We dont know the Business Model yet, and thats pointed out. Theres talks to moptize, for them to single, 24 years old, the ceo, to talk about ways to bring advertisers in, but it remind me of yo, the other startup, valued for what . 10 million. It did cost the tweet this morning about snap chat, its not absurd, crazy growth, clear monthization path. They have growth. I think 33 of kids in the country are using it. Its a human phenomena. Can you actually monetize it is the biggest question. They need much more fancy and innovative with the ads so they do more than on facebook and twitter did its going to physically work. I would say take the money. Take the money they have a hundred million users a month, and i guess you can stack that up for what app selling for 19 billion, with more than 600 million users, and twitter has 300 million . Bolting on another business like ali ba ba. Thats where its more than arguably independent. I dont know, burger king bought tim hortons for 11 million with 4,000 outlets all over the world. Thats how you value company, but who knows. A Facebook Real estate footprint is not large, and they are worth more than that. And advertising revenue is more than so Many Tv Networks combine. Lets talk about the future. Facebook downgraded. Downgraded by the stock this morning, and citing valuation head winds, deaccelerating growth closer to the new year, but maintaining his price target of 82. 50. Tony joins us now on the cnbc news line. Good morning to you, tony. Why the move . Its a name where its better to stay on the sidelines. You see a natural growth deseller ration. They have to work in the valuation thats not too dissimilar seen in google, ultimately, going public, stalling out at 200, and really what it comes down to is take a 6300 growth rate to a 35 growth rate, and uniques are starting to mature in the business as you expect that to happen. Isnt the growth going to be lumpy . Reading the note here, you talk about tremendous monetizing, through new online assets like instagram, and the payments could be a wild card . Its one thats under valued. You search, its discussed add naz nauseam, and, in fact, what you are seeing is the Company Continuing to beat earnings by 30plus percent, really, the stock is not acting proportioned to the upside help validating what wee are saying, but whats right thats not picked up it a payments opportunity. I said that could be as big as the ad market for the company, however, i think payments is something that does not happen imminently but more a year down the road. If you put the books down and you any about the way in which we transact in society, thee big breakthrough has to be able to transfer cash or credit between us in a social media way. More than bitcopy, more than your visa card. That surely is the future, and therefore what you need is a social Media Connection that basically links everybody, and that is facebook. Pay attention to the fact they are rid of facebook credits, linking to paypal. Theres credit card integration to the facebook profile and connected to a million merchants on the other side of the line. The bigger opportunity is offline world. How do you bridge that . Its something thats a large opportunity they cannot overlook it. The thing thats clear, though, is they are still going to stay focused on the core facebook experience today, and they will not rush to market with a payment product inside the next year. Tony, walk us through the multiples, what do owe keep our eye on . We felt they clustered around, and the google historical chart, and that validates the point looking at the names today, they chuser around that, so facebook, i think, sustains this very high price to sales growth rate, you know, multiple, but, again, as the growth rate comes down from 60 to 35 and they sustain that multiple, basically, the valuation works against the company. You are getting some heat for keeping the fair value at 82. Why not move it down . Because we really think that, you know, the fundamentals are in tact to where we are at. You know, the stocks moved up a lot year to date relative to the market. The fundamental storys in tact, using the same valuation approach before, but we say now lets take a riskreward approach to the company with not as much upside to the Company Versus a twitter which we recommend relative to the mobile space. Tony, good to hear from you, thank you for joining us on short notice. Sure thing. Up next, someone who has seen the fair share of wall street milestones. Art cashins take on this opening bell. Take a look at futures. Ahead of the open right now, looks like we are set to continue the games with the dow looking set to open up 26 points. More squawk on the street from the New York Stock Exchange straight ahead. You want to be the best investor you can be. You want to cut through the noise of an overwhelming amount of analysis. [ all talking ] you want the insights that will help you decide which ideas to execute and which to leave behind. You want your trades executed in one second or less, guaranteed, and routed with institutionalquality technology. Look no further. Open an account and find more of the expertise you need to be a better investor. Lets bring in art cashin, joining us this morning at post nine. Good to see you, art. Good to be here. Record highs, clean volume, whats it worth . Jason at sun dial research put out a paper overnight talking about getting to new highs and low volume particularly with the month of september coming up. And, unfortunately, history gives us a muted picture of it. If you have high volume, you get follow through easily. Low volume into september, we only had big carry through a few times. Now, were in unusual times these days and wait to see if mr. Draghi delivers. Were at the wheres the beef stage, and well see what happens. Certainly expectations are rising. What do you think of the cross asset correlation break down . That is, lower yields, higher stocks, stronger dollar . What does that signal . Well, you have to remember that some of that gets static from geopolitical turns. Talks in ukraine. Yesterday, we saw a reversal, went in sowning hardlined, came out sounding like they might get a cease fire which is interesting because the ukrai ukrainians want to proceed, but mr. Putin got his way and a cease fire is coming. As to the divergences, i think im going to keep watch iing th yield on the 10year and see where stocks go. I think you can have to going on. The yields in europe so low youll have u. S. Buying of u. S. Bonds. Art, thanks for that. Good to see you. Opening bell four minutes away. C for a while. But now that we have the Adjustable Base, its even better. Male speaker 2 when i put my feet up on this bed, my stress just goes away. I go up, hey. Female speaker our tempurpedic is the best thing in our house, except for my husband. Wait. Wait. Where are you going . Female announcer 1 discover how tempurpedic can move you. Female announcer 2 save up to 500 on a tempurpedic mattress with Adjustable Base while supplies last at sleep train. til labor day you doto reward yourself. T get a queen size serta mattress and box spring set for just 397. Not to labor the point, but this sale ends monday. 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