Weakness this morning as we get set for the open tim cook wants to quote yell out and scream about ai. Well fill you in. And the king of snapchat just went platinum. Dj khaled is ringing the bell here first up, we mentioned the downgrade, how much of this is digestion of this new fed . Well, im the one to ask that thats a dj. Heres the deal. I think that the many people are ascribing way too much to the fed. I think the fed did business as usual. Theres a vicious rotation going on its a continuation of what we saw on friday. If you look at the last 20 minutes of trading yesterday you saw the repeat of what was friday which is a bang down of all the big hightech stocks and then money back in to retail and to finance i think why people were fooled it didnt go back into oil low tech health care, also higher valuation health care you watch celgene and biotech. Watch Illinois Tool Works which is a great tell for the industrial you can watch jpmorgan, you can watch the trading of wells fargo. There was a real rotation going on there was not a lot of money driving it Everyone Wants to attribute this to things that were said by yellen this is exactly what was going on on friday somebody wants out of these kind of stocks. We can be in the market right now where it could be somebody maybe a large mutual fund theres nothing going on in the companies. Now today analysts who are who had been on the fence come out and now we have a downgrade of spelunk for competition and we got a downgrade of nvidia, competition. An interesting downgrade from canaccord about alphabet theres nothing. It doesnt matter. These are the days you do that very interesting because yesterday goldman had to bump up Nvidia Nvidia is the ultimate battleground because its doing very well. But tim cook, might want to jump up and down on Artificial Intelligence and they have nothing in their quiver. But theyre throwing asset aileen on the rotation and janet yellen is trying so hard to be a nonevent and we confuse people she said that things are okay. We get the claims numbers, they tee best in ages yes, we dont have Wage Inflation but you know i have to tell you if you attribute the decline that were going to see in spelunk and alphabet and nvidia toe anything that yellen said, it will be a real stretch. Im not going there. So you dont think theres any deserved nervousness about the treasury market behaving like or preparing for a policy error by the fed i would have thought that if Interest Rates were not going higher today we have a real tell. We have dramatic increase in rates. Its only about a third to where we were yesterday, but if rates had gone through two today i might have adjusted my thinking and thought that yellen is more powerful a couple days from now, when things settle down well forget that we attributed anything to yellen because in the end, the last half hour was about stocks that should have gone down if she was being a hawk all of the housing related stocks went up well, if she is going to wreck Mortgage Rates by taking then up what group should have been the most powerful decliner the group that went up we ought to be careful in relating yell on the what happened in the stock market given the last half hours moves. The bakes start banks started to move up before she went to her rate hike. You think its too much to extrapolate yellen to market you dont put stock in the analyst downgrades mizuho on apple. No, theyre nice people what does dj say we the best. He talks about keys to success the keys to success is to downgrade google on a day when it longs weak, okay . So the only thing that would move you would be these preannoun preannouncements that would worry me jabril came out, yeah, theyre yapping, yellen yellen, yellen, theyre yelling yellen i listen to jabril because im a complete geek. I get home from a great dinner at a hotel with my wife, jabril, no, they do 24 of the business is apple first rule about apple youre not allowed to talk about apple, its like a total fight club situation. Jabil says if you look at it being on a sequential basis, on year over year basis i think its quite good but i cant add a lot of color bingo, apple is on target so theyre the heaviest right now people want to knock down apple because its like whack amole, boom in the end, carl, we may look at the stocks, nvidia cooled off, i want to get in there because gaming is good apples come down to the level we have been there before. Thank you. A couple months ago, right . We have been there before look, again, if you look at the industrials and the housing stoc stocks after yellen talk and they got knocked down, but i look at the employment number, its looking good. I think yellen is trying to take herself out of the picture we should look at the tstocks to see if they dont bottom between 10 00 and 10 30 today. Claims at 2. 37, another head shaker empire is the second biggest sequential jump in the history of the survey. I thought that was you know, thank you for mentioning that i wrote that down. I dont usually mention empire, but empire is strong maybe new york in the last in the last 18 months has become an Industrial Power but what this is, theres business picking up. I mean, this could be corning its a volatile its volatile, but volatile to the good side we have very few of the federal reports that are bad we had inventories lower yesterday. Yes, i want to see Consumer Lending be stronger. But things are better than 1 fed hike 1 rate. Things are stronger than that. When we get this employment number i keep thinking, theres one thats going back to 300 we a lot of layoffs in a lot of Different Industries we hear about, but no. The most disturbing thing today was kroger. Which well get to in a bit. Because they employ a lot of people. Kroger a big employer. Well, guides to 2 to 2. 05 they were just on squawk a few moments ago. A margin story. This is a dogfight. And yesterday we didnt talk about whole foods because john mackey, hes the ceo, he was saying that a bunch of greedy bastards thats janet trying to put whole foods in play. Im not saying thats disingenuous, but remember walmart wants to own food. Amazon wants to too, but theres only so much they could do although the packaging for cold foods isnt bad for amazon we order a lot of amazon food now. But this walmart is not to be reckoned with. I mean, they are just coming in with guns blazing. Theyre unbelievable. Yeah. Kroger is going to be the focus at the open for sure brief pivot to politics here special Counsel Robert Mueller reportedly expanding his investigation beyond russias role in the election according to the Washington Post. The probe now includes an examination of whether the president attempted to obstruct justice. He tweeted they made up a phony russian story. Now youre witnessing the single greatest witchhunt in history led by some bad and conflicted people he doesnt overtly confirm the obstruction report from the Washington Post. He doesnt say who he means when he talks about bad and conflicted people. No but my problem is they appointed a special prosecutor to look to see if he was obstructing justice. That was kind of why they appointed him. They wouldnt have appointed him to kind of twiddle his fingers and that was the deal and whether there was a talk about whether trump would fire mule theirs the game i mean, theres great gravity to appointing a special prosecutor. You appoint him because theres something wrong that you want cleared up this is no were viewing this as being still one more surprise thats why he was picked so you know the futures did take although gold is down 20 bucks. Gold is really thats the one that stumped me. All this worrying and hand wringing youre doing, be careful. Its not so bad. But like i said, we can easily craft really negative stories today. Im not going there. I refuse to do it. You mentioned layoffs, jim. This week has been sears, imax, boeing, bank of America Today and now nike has an announcement 2 i believe of the Global Workforce. Wow thats wow, nike. A sizable number of people. Holy cow, nike. That is thats very interesting. I have been waiting for nike to take some action i didnt think it would take that action. Nike does not like its stock stalled between 50 and 55 forever. Mark parker hes kind of a belichick figure in the business everyone assumes that kevin plank is the hard charger, but parker is the wolf in sheeps clothing this is a very interesting announcement he wont stand for that stock price being where it is anymore. Wow. Nike. From the release, organizational streamlining will speed up the execution. Those who remember read the best business book, shoe dog know that phil knight ran that company with seven misfits. I think parker has taken stock in saying we have too many people and thats china sells it very good. They have nike espn all the guys spent too much money on sports. Yeah. I dont know about the payoff right now. I do know that i have never made a lot of money betting against nike nike has been a phenomenal phenomenal stock has not been a phenomenal stock lately and maybe this is going to two quarters from now impact how much money theyll make. Really interesting. This new alignment they talk about specifically driving growth in 12 key cities. New york, london, beijing, shanghai, tokyo, berlin, some others do you see it as a company ahead, but trying to stay ahead . Yeah. I mean, look, i think that everybody is trying to figure out whether theyre bloated or not. When their stock hasnt done anything i find that this this is a remarkable story because nike is really unassailably the best. We have not talked enough about how nike stock hasnt done anything pvh stock has moved up skechers stock has moved up. Under armour stock has moved up. Parker not reacting to the stocks, but he says come on guys his Conference Calls are very good he doesnt like whats happening at his company, wow. Direct to consumer is where he needs to do it i like him, hes trying do more personalization. Lets watch this stock the stock gets hit first because people say wow, things arent so bad and then it comes back to life mark parker, not to be trifled with. Well take a break. When we come back, tim cook says theres something that makes hip want to yell and scream and well tell you what that is. And dj khaled has been referred to as the king of snapchat hell join us. Some pronounced weakness in the nasdaq futures see what happens when the bell rings in over 15 minutes i put everything into my business. And i had all these points from my chase ink card. So i bought ingredients, utensils, even made custom donut cutters. Wow all with points. Thats how i created the ripple the doughnut in a doughnut in a doughnut. Suddenly its everywhere. I mean, it really took off. What will you create with your points . Learn more about the ink business preferred card. What will you create with your points . Steve, other than making me move stuff, im here at the Td Ameritrade trader offices. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. Become a villain again. Mmm. [ minion babble ] [ minions cheering ] [ minions sighing ] [ minions cheering ] [ minions booing ] okay minions, were going back to villainy. [ minions shouting ] so bad so good that im so bad. [ honking ] so, youre villains now . [ nervous laughter ] i mean, hello sweetie. Despicable me 3. Rated pg. Got some breaking news on Industrial Production. Rick santelli has that hey, rick. Yes, more data. May Industrial Production if we look at that number it is 70 im sorry. Industrial production is down everything is moving so fast, its unchanged what i was really paying attention to the most was Capacity Utilization up changed we were expecting up 0. 2 we did garner an extra 0. 1 last month. Utilization rates thats more my favorite and that one we expected 76. 8. Similar to the last look, but it was down at 76. 6 but keep in mind, last month 76. 7, okay is the best number going all the way back to august 5th of 2015. So utilization rates are still running on the high side and that i think is something to Pay Attention to carl, back to you. All right, rick, thank you so much well continue to watch the data by the way, dj khaled is making his way to the nyse floor. Well talk to him in a bit not just about the music business or his nike collaboration. But the 3 million facebook friends, the 6 million instagram followers. The king of snapchat probably undisputed king of snapchat. What a great guest because one of the things thats happened in the last 18 months people going from having experiential i want to take taking pictures of themselves to wanting others to see their pictures whos done it better than this man . Nobody that 2yearold is huge. Thats his son, right . Yes. Trying to keep up here. Not easy thank you, dettwiler. Im so excited about it, i want to yell out and scream. Thats tim cook describing his plans for augmented reality. Cook suggested a plan to repatriate overseas cash with a reasonable tax rate and for future i come up with the simple system. I go for zero deductions, i would be draconian and say none. Maybe it can get to 15 , that people are talking about maybe its 20. That covers why the home pod is 349, all kinds of discussion. The augmented reality is one of Service Revenue the more augmented reality you have the more the more apps the more games the more revenue. And there was remember the downgrade that came the weekend the apple massacre, the sunday night massacre is whey call that from mizuho really questioned the Service Revenue. My contacts at apple say that would be one of the things you would not question augmented reality would mean a great deal and the high pod, the Apple Ecosystem will get people to try it and the indian phone companies if they know that people want apple theyll find way to get those phones. So we can write off apple because its down for four days, carl we should write it off, right . Apple must be going bankrupt the best days of apple are behind them. Tim cook hasnt given you any performances up from 50 to 140. What is that heres a line from the interview talking ar can we do everything we want to do now, no the technology is not complete yet but threes the beauty to a certain degree this has a runway, its an incredible runway. Its time to put the seat belt on and go. But i have to tell you, this of course texting all my kids about dj so i have something to say so this is considered theyre going to have it bendable. This is so hes got to come up with anything else, hes not come up with the this does not have wings, it will not take me to Englewood Cliffs by holding it up. Until he does, hes finished there. That is the whole arc of the analysts all right . I hold this up, carl, it does not beam me any any where, scotty you know what . If he doesnt get us to live long and prosper with the next phone, im telling you im going to switch to the company the fire phone fire phone they put that did they put that out arson phone is that done i love when we can wade in your sarcasm, jim. This watch, this does not connect me directly to the president thats also a mistake. He talks about serving on White House Councils he says he and the president are dramatically different but the bottom line he feels theres more to be done by being engaged. Who has committed hundreds of millions of dollars to American Manufacturing . Not the president. Not the president. Tim cook too bad hes finish and the company is in bankruptcy. We want to take a short break. Well count down to the opening bell of course dj khaled will join us after he rings that opening bell in just about ni mutneines at fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Wee talk to dj khaled in a minute you want to watch that google down braid. Yeah, ill tell you why its a downgrade about f. A. N. G you can say what they do about google, canaccord, because its talking about going too far too fast saying the gross margin is headed marginally lower. You can always make that case, but valuations stretch see, when you have analysts say valuation stretch theres no comeback, right . Well, sure i wish i had bought it here. Up here the valuation is stretched. You could have said, listen, head and shoulders a ton of reason to downgrade these. But heres the problem a hedge fund, yes. Wants to catch down to 928 a person at home may be selling this company when theyre 70 billion of waymo embedded, autonomous driving when search is doing really well they can train themselves on any area, so yes, a great hedge fund call but not for people at home. What do you make of the point that the increase in the ad load over the last couple of years on youtube, on mobile search is going to be hard to maintain hard to sustain. You know, youre going against youtube, going against ruth porat who thought i through. I go out to california quite a bit, they have thought this through. Like going to junk up the facebook feed no, hes going to get killed by snapchat and instagram is even better by the way im the only one who hasnt collaborated with him drake did, Justin Bieber did but we have to be careful. This is a generic what they did was they downgraded f. A. N. G. , but chose do the g which is a. There it is. Like the weather board, its hot light here here its raining, this it is. Its a Weather Report downgrade. Looking like theres going to be some storms but when the storms pass, buy. Well get the opening bell in a minute dont gowa ay. The power of innovative thinking. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clien