Tenyear yield did fall below 2. 3 on the third miss in a row largely better than expected from jpmc and wells and earn,s season kicks off. A big week for retail walmart gets an upgrade from goalsm Goldman Sachs. Financials are driving, but is the real consumer economy primed for a rebound Jpmorgan Chase falling despite posting better than expected Quarterly Results the bank got a boost from lending but hurt by weakness in trading. Jamie dimon says, the u. S. Consumer remains healthy, evidenced in our strong underlying performance in consumer and Community Banking wells fargo with an earnings beat and a revenue miss and citi exceeds on the top and the bottom line. All these names have had quite a run since the election not hard to know how much they deserve today in light of what the macrodata said the results would give me the message that things are on track. Going roughly in the direction expected and theres improvement there. Jpmorgan, 12 return on equity thats one thing that stands out. Thats a little bit of a notch better than the bank has been capable of more like 10 . But, you know, the stocks have built in a lot capital return all the other stuff thats on the come so i do think right now, theyre going to probably trade on the bond market, right day pointing data. Yields are coming down and thats the immediate link in terms of reaction. That roe num sber something to marvel at i can remember not that many years ago there were those who believed perhaps wed never see a double digit roe from these bigger banks they dont seem to trade as much on that as they will on the prospects for the net interest margin, nim. Still makes me wonder what well see as we get goldman and morgan later in the earnings season given goldmans significant variance from its competitors such as jpm. People always look for the trading to see if thats a leading indicator. But often in a given quarter, some are leaning one way some have a different franchise and so it doesnt tell you one way or the other it was expected to be relatively soft on the trading side and the response it looks like is the yields are going to drive these in the short term. On the call, they did point out trading down 14. Fixed income trading down 19 mar ann lake said markets need volatility driven by events. Although june was relatively quiet, the latter half of the month improved a little bit. One quote that stood out from some reporting on the call, dimon, who cares about fixed income trading in the last two weeks of june. Hes got bigger fish to fry from a policy standpoint. Certainly in terms of what he wants to focus on going ahead. Talk about anniversarying a period when you had more opportunity. Anniversaring the brexit response and the market has to be turned upside down. You complained about that, too, because nobody dacaught it perfectly right. We didnt talk about pnc which is also going to trade down. Pretty good performance on the pnc front. They still have a big stake in blackrock. It ends up being different than a Superregional Bank one dynamic covering all the banks will be cost control at wells, up 5. 2 expenses as a percentage to revenue. 61 is above their efficiency window they try to keep twinebe 55th in 59 thats the battle you can fight. Jpmorgan has telegraphed it that expenses are going to be up because theyre going to invest in a lot of new stuff, and it did happen in this quarter rose faster than revenues. Wells fargo is still deal with this situation where its a premium valued stock the franchise is a little bit under question and new management and all the rest of it it has not really traded that great relative to the overall group. We heard Elizabeth Warren continuing to go on about the banks board of directors. Not sure thats going to get anywhere doubt it will going after yellen as she was testifying yesterday. But wells has been something of an unperformer versus the peer group. Continues to be. The big question with them in general, you came into the year thinking, wow, its been this long years long stretch in the desert for the banks now investors are rediscovering them but theyve outperformed the mark oat aet them but theyve outperformed the mark oat ae on a 1, 2, 5yer basis. You look at jpmorgan, thats where it traded in 06 higher returns on equity on a p e basis. Its been accounted for and how the stocks have they had that just that takeoff right after the election people year to date returns and say it hasnt been the various groups it has lagged. But the numbers from november 9th until the end of the year were tremendous. Were going to watch, obviously, for their activity today. Some of the macro stuff. Retail sales did fall unexpectedly in june by 0. 2 hurt by weaker spending at Department Stores, restaurants and gas stations they upgrade the dow component from neutral to buy. Walmart is well positioned to succeed and weather competition from amazon. Jpmorgan adding gap to its focus list its the second monthly decline on retail sales. We were looking for plus 0. 2 got a negative 0. 2 in addition to cpi, which is gone prior was 19 now 17 well wait some probable gpd estimate cuts. Obviously the story of a hotrunning economy has not really been the case for a while now. You have essentially these really moderate to weak numbers. Especially on the consumer side. Business to business stuff is doing okay ism is holding up. Retail sales and then not unrelated to that, of course, the Inflation Numbers on the consumer end cant pick up at all. Whats interesting about the Goldman Sachs call on walmart, conviction buy they see 12 upside which is fine because goldman is looking for a flat market for the rest of the year. But it just shows you its a defensive idea and why do they like walmart in this environment because they are this big, tremendous ship that can invest to protect its franchise not so much that growth is going to be really kind of picking up from here. So thats kind of telling you what kind of retail environment were in the price target is raised. 84 a share to give you some senses too where the stock is. To jim cramers credit, he has been talking positively about walmart of late saying dont penalize that while you extol the virtues of amazon. It is amazing to think, though, overtime, and you and i have been doing this for a while. I did a documentary on walmart a long time ago. It was by far the most powerful name in rekale and every single way, and its power was completely feared. You could almost substitute walmart for everything said about amazon today control over suppliers. The largest of everything. 2004, thank you, we did our first documentary on walmart now here we are 13 years later and so much has changed. One of the interesting things on the goldman note, it may be relatively protected from an amazon, whole foods and other grocery competition because they are in such small markets. 4,000 stores or something. Theyre not obviously in the whole foods metro areas. They have been making the investments that many people think of necessary to be able to effectively try to compete and as we pointed out, they have essentially Controlling Shareholder in the form of the walton family, broadly speaking, that allows doug mcmullen, the ceo, perhaps latitude to do things that others might not be able to in terms of taking shortterm pain for what hed hope would be longterm gain exactly gap, too. Thats a defensive, like, look, these guys are going to be one of the big ones standing in the apparel category gap has been shrinking for years. Its not new to them that the mall is dying and now we have to go from growth to getting smaller and trimming down. Only 1 out of 7 analysts has a buy rating on it its not been a light stock for a long time. Financially pretty strong. 4 dividend yield and thats basically, i think the quote from art peck, the ceo in the jpmorgan note was nothing thats happened this year has been surprising to us baseod what we expect meaning in the environment so they werent looking for great things eyes wide open. Ulta is part of this retail sense and gets an upgrid to buy from neutral at goldman. They cut their target from 321 to 310 again. An example goldman believes where they can weather the phenomenon of amazon a name which hasnt been shrinking as much as gap has the stock faltered recently after this incredible run. This story about Department Stores starting to discount cosmetics. The stock had been rolling over. Before that. But mostly thats been about, everyone looking at retail and how depressed the traditional mainstream retailers were and saying, well, how much of a premium can we sustain with ulta, ross stores, all the ones people were hiding in. Its interesting you get this call the market gave you an opportunity to pick this one up. The up trend or macro remains intact for the stock we have caplan making news on the tape brainerd and bullard saying the cpi inflation data is causing them to reassess the path of hikes. Yellen yesterday talked to more about transitory nature of inflation and factors like Wireless Services that are distorting the overall number. They certainly dont want to say, hey, its a new ice age for inflation, and, therefore, our plans are completely up ended. But you have to acknowledge, the market is pricing out the idea of a september hike. Its a popular treat today. So you can say what you want. You hope inflation picks up. The market was worried about the central bacnkers are going to ignore it altogether well not try for 2 well start hiking even in the absence of a trend in that direction. When you look at competition amongst the wireless players resulting in fewer price increases and or price decreases, then you wonder whether or not there could be any consolidation allowed. Thats where i always go when i wonder would 4 ever be allowed to go to 3 when you had the fed chair talking about that more data to come well get Industrial Production later on university of michigan and the rate count at baker hughes when we return, wall street versus main street what it could mean for a record run for stocks also a ge company has begun trading as a public company. Well talk to Lorenzo Simonelli after he rings the bell at the big board. Nasdaq is riding a fiveday win streak best day for the dow and the nas since may 26th, seven weeks ago. More squawk on the street in a me. Listen up, heart disease. You too, unnecessary er visits. And hey, unmanaged depression, dont get too comfortable. Were talking to you, cost inefficiencies and data without insights. And fragmented care stop getting in the way of patient recovery and pay attention. Every single one of you is on our list. For those who wont rest until the world is healthier, neither will we. Optum. How well gets done. Big day for macro data lets get to Rick Santelli yes, june read on Industrial Production should be hitting the wires now. Finally we get a good number we were expecting up 0. 3 up 0. 4 and gain 0. 1 on a revision into actual positive territory from unchanged to 0. 1. 76. 6 a couple tenths light and a couple of tenths lighter on our last look from 76. 6 to 76. 4. We are hovering under 2. 30 we want to pay close attention to this because of the spike in rates a couple of weeks ago with europe and some of the issues there. And, of course, the drop baseod yellen lets see how it all pans out. Carl, back to you. Well see you in a few minutes, Rick Santelli, watching the data for us today. Stocks aiming to end the week on a positive note after the dow set the roecord close for the 24th time this year. S p on pace for its fourth positive week in five. We had the vix under 10 for the 23rd time yesterday. And mike today is writing about this notion of whether or not meat and potatoes sort of needs to outperform now. Thats the question as the macro data has cooled down its not been a story about inflation picking up and wage growth in particular, the main street economy doing better, you know, the market has essentially said thats fine we know how to trade this. We go to the wall street beneficiaries. The Asset Managers, brokers, discount brokers all leading junk bonds flying off the shelves at generous terms in the economy. The financial asset economy doing great, holding the fort on the market while we know Retail Stocks getting pounded and everything thats a proxy for how households are doing is on the edge the question is, can you stretch this much farther without having some rebound in the retail thats why the upgrades of walmart and gap are interesting. Somebody saying, look, maybe its gotten pulled too tight in that direction its hard to say that its bearish for the overall market when you have Asset Managers and brokers and exchanges and emerging market stocks and other Global Indexes confirming this positive story so its not as if were saying, look, its got to fall apart unless the data get better but i do think that theres a tension internally in the market here where its mostly been about paper. The paper economy, not the real economy. You point to target, for instance, this week and the guidance that maybe sentiment got overstretched to the down side target didnt say anything is going to be good its a still pretty negative result theyre forecasting just less negative than theyre expecting. If you look at the valuations of macys, kohls, gap. Enterprise value to cash flow, its not that far above the 08 trough the market is saying this cash flow is shrinking or impaired so you already have kind of priced that in. If you get any relief on that front. Thats the internal question, i think, thats happening in the market right now you look at that macys yield. I was asking you about it at almost 7 . They have the ability to continue to maintain that kind of a payout. The question, of course, becomes for any of these companies in terms of their future capital, does it make sense to continue do do a payout that represents as much as 7 of the stock price pmpt it turns out to be a red flag in a way a yield thats that conspicuously higher it almost creates more questions about the company than it answers. And, you know, but it does also reflect the sentiment. Even with a 7 yield, people are not rushing to own this thing, even though theyve covered the dividend reasonably well. What was your take on yellen yesterday saying that 3 in five years would be really challenging. Quite challenging. I think the gdp math puts you in that position if you are an exist like yellen of saying the population grows at less than 1 productivity, even at 90s levels is barely going to get you to 3 . So how do you flip a switch and get us there on a sustained basis . You have pops in that direction. Third quarter of last year, gdp for that three months was 3. 3 coming off a really weak number. I feel like she wasnt really saying anything the market doesnt get or the Economists Community doesnt understand its funny, though we anchor ourselves on that 3 number thinking that we were doing something right then, doing something wrong then as opposed to de ed td to being in circumstances. Policy is a big piece of that well talk this morning about the push to repeal obamacare and the ramifications for tax reform well talk to Grover Norquist, of course. Well known antitax crusader more squawk on the street from the nyse straighahd. T ea thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. So you can get business done. 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, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Weve been listening in on the banker calls word is that the jpm call got a little colorful. Rarely it does, but it did indeed one particular question that jamie doesnt like low growth over the last eight years was down to bad policies citing recent trips hes made to france, israel, india and others he said this every single one of those countries understands that practical policies promote business and growth is good for the average citizens of those countries for jobs and wages, and somehow this Great AmericanFree Enterprise system we no longer get it. If the current gridlock goes away, well grow faster, but if it continues, we wont, in fact, actually grow slower hes seen a sea change in the eu he applauds president macron of france who he met this week for clearly making france more attractive for banks and for business jpmorgans numbers beat on the top and bottom lines but have seen share price declines today. Jpmorgan, this is down to less Net Interest Income in favor of a rate hike. They lowered guidance from 4. 5 billion to 4 billion. But cfo marianne lake said the longterm effects of rates normalization are still very much coming through. Loan growth of 8 while strong was also lower than the previous guide anance of 10 . Trading down 14 year on year. Slightly better than the decline of 15 expected. Wells fargo and citis Net Interest Income was resilient. Overall trading for citi was down only 7 versus earlier guidance of down 12 investment banker fees and lower provisions also helped city. Wells fargo, shares under pressure due to softer loan growth down 1 sequentially compared to up 0. 1 last quarter. Wells down. Well come back to you for updates on the calls that continue as we speak opening bell just a few minutes away well talk to the ceo of baker hughes, a ge company hesbo to ng autri it. Hell join us in a moment. Whoooo. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. You