b ly bab ba. i think it's going higher. >> i do own facebook stock and calls. i'm going to sell my calls. >> scott >> i like to stay with amgen. >> thanks for being here >> thank you that does it for us. "power lunch" starts right now. >> i'm michelle caruso-cabrera we count down to the fed decision in just one hour from now. still, it's all about earnings, earnings, did i mention earnings is this the ultimate goldilocks for investors? and jim cramer goes one-on-one with corbat and talks about the market moves straight ahead. and being taken on a roller coaster ride this year, it wouldn't be cable without puns

"power lunch" starts right now ♪ >> welcome to "power lunch." i'm melissa lee. all three indices are hitting record highs dow is up by 93 points s&p up by 1.5. nasdaq adding about 9 here we should note that the strength of boeing leading the dow and accounting for 120 points, hitting an all-time high, it's boeing best day since 2009 this comes on the back of very strong earnings. at&t posting strong gains following positive results amazon, expedia and akamai at a low and ibm at a six-year low. brian? >> the markets and the fed are

where we begin today the fed is expected to leave things unchanged how hawkish is the key for you and your money as president trump tells "the wall street journal" that he hopes chair janet yellen will keep stocks low for the foreseeable future stocks once again are higher steve liesman following the action in d.c. and bob pisani tracking the markets at the nyse is this all about balance sheet reduction conversation or do rates still matter >> you've got that right there is a slight, brian, chance of a surprise this afternoon if the fed were to announce reducing the balance sheet now rather than in september as expected fed chair yellen said it could begin relatively soon but there is no reason to surprise the markets today. the fed does mention the balance sheet reduction and the question

is how it will react the big story has only been the modest reaction in the fixed income markets really a lack of concern with this announced plan by the fed to reduce the $4.5 trillion balance sheet. and inflation continues to run below the 2% objective the fed statement in june expects inflation to rise but some officials are worried they want more evidence before hiking again the odds at 42%. and the odds of fed chair janet yellen keeping her job is better after trump said that he has a lot of respect for yellen. he said, "i like her i like her demeanor. i think she's done a good job. i'd like to see rates stay low." the president also said national economics secretary gary cohn is

being considered for the job that's curious because yellen's term is up in january. the president thinks he can get that through the congress pretty quickly. >> steve, thank you very much. let's go to bob pisani where stocks are rioting the earnings wave to more and more records. what's driving the action today, bob? >> it's a pretty strange day when the dow is up 100 points and s&p is up only 2 points. it's a limited number of stocks and a price-weighted index this is what we've been seeing all year you have market leaders and two market leaders and market laggard like energy when it slows down a little bit. oil at $48 constant rotation without losing the key leadership group is why markets are at highs a couple stocks beside boeing. new highs on many of them and

advanced microhad a terrific report broadcom, new highs. up 19% the guidance is up 23% these are fantastic numbers. they've gotten into all new businesses in the last few years. this is why amd continues to be a star in the space. slept report overall pricing has been increasing in the last year or so and the chinese aren't importing nearly importing as much. better economic conditions that's a major factor. overall, right now, i want to mention the asset managers and as the stock market goes up, more stuff, more value, they make more money. finally, a little bit of a quarter of the s&p 500

reporting. we're almost there 10% is a magic number for people revenue up 4.7%. remember, guys, that revenue story has become a big one because it's not just buybacks anymore. the dow is off of the highs at 88 points. >> bob pisani, thank you as we gear up for the fed decision in about an hour's time, is there anything to interrupt the goldilocks rally on wall street joining me is richard, global strategic adviser with pimco katie, is there anything that the fed could say or do today that will move the stock market one way or another >> we actually think the fed is going to forecast forward and enacted later on this year i think they will be very, very careful about the way that they

present this to the market and recognizing that, as you said before there has heretofore been balance sheet reduction. we expect that to be a very straightforward announcement we don't expect any movement on rates. i think the fed will give the market what it expects today so there's no reaction to the fed but what the market is reacting to is the fundamentals, which continue to be very, very strong as you said earlier, we have very strong organic revenue growth with nearly 5%. we have over 7% earnings growth on what the companies have reported with great results from industrials like boeing and great results from financials and technology companies which are postings earnings in the double-digit area. the earnings season is shaping up to be quite good. >> richard, pick up on those thoughts there and guide me through the discussion on inflation. >> right. >> the fed would like to see it higher there is a relative absence of

inflation. do you see the fed raising interest rates any time more this year? >> that's a good point the fed is in a bit of a box because they keep forecasting 2% inflation but they've been wrong for five years i think they will stick to the script and in our views, they will really want to be independent and see if the inflation data starts to pick up if we're seeing here in november and inflation is running at 1.4 or 1.5, they probably don't pull a rate huck. >> katie, four straight months of weakness here in terms of pricing, what will that do in terms of market -- if that pushes the expectations for a hike out, how does the market respond to that? >> i think they've already been pushed out there's a 10% probability of

september rate hike. so virtually zero and less than 50% probability and they were keeping rates very low and creating that goldilocks scenario and they are propelling valuationings that have been supported by good fundamentals now. >> are stocks expensive? >> it's another leg up on stocks and it's going to require stronger growth or a big, big tax cut next year on corporate

>> katie, you laid it out. things are good right now. what's the greatest thing that the fed could do to screw it up? >> i think being overly hawkish right now, pivoting away from the inflation argument and talking about financial stability as continuing on this rate hike would be taken negatively and it's all about looking for the hawkish tone. >> richard, thanks so much. a news alert here in the bond market. rick santelli is tracking the action at the cme. yields are high on this one? >> yeah. i'll tell you what, melissa lee, this auction gives us a commentary about the fed statement, in my opinion 1.884 was the yield at the auction, well below the 1.89 or 892.

lower yield, higher price. another "a" for the five-year note that's back to back a's. one more and we can start an auto club. 2.85 bid to cover. much better than the option average. 69.8 on indirects. that's the second best number on my dataset which goes back 15 years. the highwater mark was december of 2016. finally, 24.1% go to primary dealers. 6.2 directs above average. this option was great. top to bottom, they are not looking for a hawkish fed, in my opinion. most are looking for rates to come down. will they be correct i don't know we'll have to wait and see. >> rick santelli, thank you so much in just last hour, the united states announcing sanctions against the venezuelan government and senior administration officials told reporters if the country goes through with the controversial

vote this sunday, there's going to be even more damaging sanctions to come. venezuelan government holding a july 30th vote which would create an organization to rewrite the constitution without the permission of the country's current parliament controlled by the opposition stronger sanctions could lead to a decline in the widely held bonds. a senior administration official said, by the way, a venezuelan government official previously sanctioned, they've frozen his assets and found hundreds of millions of dollars in accounts around the world that's one person who has worked for the government so that's an extraordinary amount of money to have seized from somebody who was a civil employee, civil servant. >> they pay well. >> apparently. >> did you see the awards for heroism in venezuela toilet paper that's their award it's a luxury. >> premium item. >> well, it can be, believe me. still ahead, jim cramer goes

one-on-one with two big ceos michael and steve. jim joins us with the highlights as we count you down to the fed. stick around >> announcer: you're watching "power lunch" on cnbc. first in business worldwide. [ indistinct chatter ] [ intense music playing ] it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the e300 for $569 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. president trump expected to make what is being described as a big announcement on jobs today at 5:00 p.m. eastern time. he's expected to mention that fox con could be setting up shop in wisconsin scott cohn has more. hey, scott. >> good to see you seven states were bidding on what foxcon has been promising for months as a major expansion of the u.s. manufacturing operations 10,000 people or maybe more

could work there and the winner is wiss with specifically, the southeast corner of the state between milwaukee and chicago located within the district of house speaker paul ryan and in the home state of chief of staff reince priebus this, according to a source with knowledge at the white house no official comment from any of those folks or from foxconn which will be in attendance along with speaker ryan. cnbc has learned that scott walker is in d.c. today though his office is not saying why foxconn is best known as the manufacturer for apple's iphone but makes parts for many other clients including microsoft and sony and last year took a majority stake in japan's sharp which is a big user of lcd flat panel displays wisconsin will pay dearly for these jobs the package could be as high as

$3 billion, over 15 years, federal, state and local money all aimed at revitalizing advanced manufacturing technology and innovation as well as education are wisconsin's strengths. wisconsin finishes 21st overall and the weaknesses, regulation and workforce in part because unemployment is so low but again, a big win for wisconsin. the official announcement at the white house at 5:00 p.m. eastern time. >> these reports said that donald trump said tim cook promised three manufacturing spots in the u.s foxconn manufacturers for apple. >> this is not that. we don't know about the three manufacturing plants and whether they exist apple has not said anything. we don't know if there's another announcement coming. but this is not an apple plant it's a foxconn plant

>> and because i enjoy the state of wisconsin, i made calls on my own and awesome reporting by you as well, scott, but two sources tell me it's going to be racine and the reason is water. so i spoke with two current and former officials within the last 15 minutes a foxconn factory, one official said that they met with the sewer and water people and slapped them with nondisclosure agreements because the water needs would be 10 to 15 million gallons a day and a current official says racine has an abigs to expand their water use. some are optimistic that this could be the new home of foxconn in wisconsin. >> i grew up not far from there and lake michigan is there. >> obviously.

>> big course of water. >> big lake. and it's a busy area this is i-94 between milwaukee and chicago. >> people may not realize this but there's a giant amazon distribution there it's called u-line if the building is a mile long, they make packaging for amazon and the german gummy bear company will open up its manufacturing facility there in wisconsin which delivered the presidency to trump is et going some rewards, apparently. >> used to be, make that drive and there's nothing there but the mars cheese castle. >> which is the exit where u-line is and amazon. >> any big win for wisconsin and southeast wisconsin, congratulations to the two boys from wisconsin >> i'm from illinois. >> but you went to school, you were a badger, at the university of wisconsin a beautiful town >> and we need a badger.

it's been a roller coaster ride for shares of six flags this year. the stocks rallying today. the nully appointed president and chairman joins us ahead. chances are, the last time you got a home loan,

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at lendingtree, you know you're getting the best deal. so take the power back and come to lendingtree.com, because at lendingtree when banks compete, you win. our own jim cramer is sitting down with the ceos of mcdonald's and citi. >> thanks, everyone. >> a powerful day yesterday. >> a lot of what is happening at citi, it's really, i would say, a revolution that's finally being acknowledged it's been going on and the first time in nine years that they had an analyst meeting and he's basically saying, i would say, if you had to read the subtext it would be, you know what, we're every bit as good as bank of america and jpmorgan and it

did encourage you to think that the stocks should be higher. >> they suggested to the analysts, it could be 100 bucks by 2020? >> yeah. let me just tell you what they are looking at is scrubbed by the feds and it's $68, roughly and jpmorgan, most of these sell at least 1.5 to 1.7. their book is no better than citi's book. i could argue that citi's book is even better because of the 50% recurring revenue stream what they are trying to do is have their stock be rerated and i thought they did a compelling job. >> we're minutes away from a fed decision there's speculation as to whether miss yellen will continue. >> yeah. >> did he say anything about that >> he said it didn't matter who.

they try to be as neutral as possible of course, i played the gary cohn card. who would be better than gary. some people say, wait a second, gary is not an academic. maybe it's time to have someone else i think janet yellen has done a great job but my view is inconsequential. >> what did michael corbet say >> put it in his words, not mine ing. >> we try to stay in the middle. so i think janet has been terrific president trump sided that we know gary and know him well he's a very smart guy. so both capable. we'll let the process pick who that is. but in terms of policy out there, we've talked about and we see a fed rate hike along the way. by the way, higher rates are actually a better thing for us and so we actually perform better with a bit higher rates than where we are and provided those rates coming up for the right reasons that we've got growth and maybe a bit of

inflation and wage inflation there. that's a good thing for the u.s. economy. >> what can i say? mike is playing the game now and no longer sitting there talking about citi holdings and the toxic waste pit and how they've got to get rid of this and that. he's got a game plan people really think that citi is still a bad fact so this six-hour presentation was to say we're back. we're what we used to be a decade ago and maybe even better and you should buy us. it was a sales pitch it came out of -- mike's been at it for a long time and those of us who know him have been waiting to do tv and a picture of 1982 when he was all-american -- >> all-american football player,

offensive guard. decided to play for solemn and brothers. earlier today, delivery was a big part of the quarter. tell us about this new uber deal. >> mcdonald's is partnering up with uber. we talked about some of the initiative initiatives. take a listen. >> we won the market with this but we've been integrating the consumer technology with the kitchen so when we capture the orders, we know we can deliver those at the same speed and at the same quality as a traditional order taker. so it took us time to get all of that working from the back of

the house to the mobile app. we feel pretty confident that the operations going to be smooth. >> that's an important thing starbucks, tempers fray in starbucks. >> i hate it stop cutting now i'm mobile >> it's a real brand issue there. >> you're so right, tyler. if they get that same-store sales, stocks see 50 in a nanosecond. >> do you think mcdonald's -- we were talking about delivery. do you think the food travels well >> steve thinks it does. as somebody who owns a restaurant, i've got to tell you, this is your biggest worry. your food could be good when it leaves and when it gets there it's soggy i hope he knows. he was talking about how he's doing the store of the future in poland where they tested it all. he uses countries as the testing ground this is a real, real fraught issue. >> it really is.

>> 1 1/2 to 2 times. >> the interesting thing is, if you -- it's the fries that i'm worried about. not the burger >> even worse than tacos. >> who's going to deliver a burger for 8 bucks that is ten miles a i way. >> it's so close to so many people >> drones. >> drones. we also want to get -- >> that coffee stays hot for weeks. >> i want wine drones. >> i'm sure they are on their way. >> intravenous. >> we want to get jim's take on apple. the president is going to hold an event at 5:00 p.m. about jobs we heard about foxconn and three apple plants are being built in the u.s. what have you been hearing >> when i met with tim cook, he

said, listen, we're going to give a billion dollars in order to have factories around the u.s. and they've already committed to corning which is putting people to work with that big grant and i don't think they meant to say three if that somehow came out they want multiple plants. i think three would be far fewer than what they expect. so perhaps the president is a little bit off on the idea of what the promise was it was to have a lot of workers and more plants. >> is there a problem tea that he's not often -- sometimes he's not precise. >> i like apple here you should own it. >> the interesting thing, too, about apple is that i just recently met with moody's and they talked about the newest -- they didn't call it a debt bond but it's the newest debt market.

it's cell phone debt because carriers are no longer subsidizing iphones. people are now financing 80 some% of buyers of big eye phones are financing it. >> a $1,000 phone -- >> i bring this up because, yes, if you make the phone in america, it may be more expensive but if everybody's financing it, you know how americans think. it won't matter what the price is it's only $21 a month, jim >> absolutely. listen, when i was poor i did that stuff wow, geez, this is -- how -- this thing goes up all the time and it starts at like 20% and goes up and up. >> and the whole argument if we have to make it outside of america because americans can't afford it, it may now be over because we're financing it like

a car. >> i guess i should be scared. >> yeah. >> i'm going to be shaking i was shaking. i was worried about the used car thing but hertz stock is up and avis and carmax. that may be a better used car prices. >> jim, thank you. >> thank you for having me >> full interview, citi ceo on "mad money" tonight at 6:00 p.m. eastern time on cnbc. bipartisanship in washington seems like an oxymoron it's never going to happen perhaps in one area it may just happen two politicians from opposite sides of the aisle coming together to create jobs, next. [ indistinct chatter ]

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hi, everybody. i'm sue herera here's your cnbc news update at this hour. congressman steve scalise has been released from a washington, d.c., hospital medstar says the six-term congressman was released on tuesday and is beginning intensive inpatient rehabilitation the facility was not identified. scalise was shot and wounded last month when a gunman opened fire on a group of republican lawmakers. a minneapolis police department is making changes in the body camera policy every officer will be immediately required to activate the cameras each time they are dispatched to an event or when they initiate an interaction with someone during an encounter. this comes after justine damond

called 911 sperm counts have been declining. over 40 years, there's been a 59% decrease but the study gave no reason for the decline. and last night in oklahoma city, alex radugo hit a fly ball that hit off someone's head and ricocheted over the wall for a home run the ball traveled all the way to the back of the bullpen. there you go ow >> yeah. >> that's the news update. no word on whether he has a concussion. >> i hope not. >> absolutely. michelle, back to you. for the second time in two days, senior republicans are using a word we haven't heard in a long time. bipartisanship yesterday did was john mccain on the senate floor today it was kevin brady right here on cnbc saying democrats have some very good ideas on tax

reform and he thinks their common ground there. joining us is another team working together, specifically on supporting startups representative darrell issa is a republican from california and darryl polus is from colorado. representative pollis, tell us about startups across america. >> five years ago, darr darrelli had a discussion people didn't have an experience or know about the startup world. darrell and i are both entrepreneurs. we said why don't we create here in congress a startup day across america where we get our colleagues to understand the startup economy visiting startup in their district. >> representative issa, since i work at cnbc, i'm hoping this means that you can work across the aisle on tax reform. what do you think?

>> we both have art lapper as a friend and adviser eric served on one of your boards we have common ground on what we believe will help america get producing way ahead of the rest of the world one of the challenges is to find those things we agree on and do them and try to stay away from those divisive issues that often divide us. >> we have breaking news that we're very surprised about. >> yep we're very surprised earlier than expected. whole foods earnings have come out and earnings have beat expectations on the bottom and top line let's go with eps. 36 cents adjusted. higher than what was pencilled in at 30 cents a piece revenue at 3.725 billion in line with analyst calls and comparables. it's better than anticipated this comes off the amazon/whole

foods valued at $13 billion and this is a bit surprising we were expecting this after the bell but we got it a little bit early. back to you. >> yes let's get back to our representatives. normally i wouldn't have done this but while we've got you here, either of you have an issue with the whole foods transaction? >> we're trying to highlight through startup day across america that tomorrow's and today's great business was a garage startup i remember when jeff bezos was starting amazon, 10 employees, 15 employees, the same with whole foods. by nurturing and capital formation at issue around startup companies we're encouraging the creation of tomorrow's great success story. >> representative perfoolis, th' got to be a new way to look at anti-trust in this country

>> my side of the aisle doesn't get to hold hearings because we're in the minority. it's up to the republicans what they want to do. of course, i think republicans and democrats believe in anti-trust and i believe we should update what it means in a digital era and i think both parties have been interested in doing that to make sure it has the opportunity to succeed and that the entrenched companies don't come to washington and use washington to co-op and enshrine their advantage into law. >> are there barriers to entry this whole idea that every merger should be skrcrutinized not the right objective. anti-trust was making sure we don't have barriers to ent trry. there's still a relatively small player in that market and i

think if safe way wants to do home delivery at the same rate as amazon, there's nothing stopping them. let's remember that the post office started off with a monopoly and a number of companies have entered it and as they've entered it, you've gotten better service, faster, more consistent in a way that you wouldn't without competition. >> and there's a famous story of when fedex was a startup and fred bet everything he had, literally everything he had on hi credit card he won and because of that he was able to go back and keep fedex viable. >> it's a great company. >> congressman issa, i'd like to turn the conversation, if i might, to the investigations that are ongoing into the russian meddling in the 2016 elections. how concerned are you about that or do you believe, as the white

house seems to believe, that these investigations are a so-called witch-hunt which is it? >> i think it can be both. you can be looking in premature places or making assumptions that there's some nefarious act but there's no question at all that investigating that often known evil empire who continues to do things nefarious around the world, including bringing down democracies when they can, interfering with elections there's no question that we have to follow the facts where they lead and the idea that you assume that you've got to look and pick into everything of the president and i'm all for investigating russia and then following the facts for that >> the american people deserve a truth and full accounting and we shouldn't prejudge anybody i'd love to see an independent commission i think that frankly if the

president had thwarted the process by firing the attorney general or others involved, there would be a bipartisan counterreaction and we can have a process in place that democrats and republicans have confidence in to get to the bottom of the matter with regard to potential collusion and manipulation of the election. >> have either of you spoken with jeff sessions >> we both have at various times but not on this matter. >> not on this matter. >> thank you, gentlemen. good to have you. startup america day. all right. well, it's been quite the ride for six flags. the company missing earnings on an eps basis however, 5% jump in attendance shares are moving higher right now. six flags' brand-new president and chairman will stop by for his plans on wreixla ahe s fgsre headed most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income.

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six flags is taking investors on a wild ride eps missed estimates although a 5% jump in attendance as well. food and merchandise spending did fall despite this, the stock is up more than 6% today joining us now to discuss this is jim reid anderson, the newly

minted president and ceo of six flags. >> great to see you. >> kind of an odd quarter. earnings on the eps number missed but attendance was up but per capita ticket spending, what people shell out at the park, was down 2%. how do we figure out -- how do you define the quarter for six flags? >> i think it was a good quarter but below our expectations we've had seven record years in a row. seven record years and this quarter was another record quarter so i think the stock is reacting to the fact that companies continue a very strong trend even though we believe we can do even better. >> project 600 not impossible and we're going to try to get there. >> so it's still possible? >> it's still possible but the early season weather affected us

in the last few months but we're still, you know, working very hard -- >> too much rain too much heat? >> a lot of rain on the east coast and also in texas. >> it has rained every day at six flags. >> it's rained a lot but the company has so much momentum there's four things i'd focus you on first of all, it's a great industry very compelling. people are looking for experiences versus purchases directly secondly, this is the greatest brand in regional theme parks in the world. we're expanding rapidly. and then third, we have a lot of opportunities ahead of us and i can describe them to you we have seven record years, as i've said. >> i have a question about that. part of the business model is upselling for season passes and active passes. how do you do that how do you -- and what do you think is your -- how do you think of the market? is it the park goers going into the park already or is there a bigger view of that? >> there is a bigger view. we've gone -- when i joined the

company seven years ago, we had 23 million guests visiting now we're at 30 million guests it's very, very great growth but still only a third of all of our guests, michelle, are in a position where they can buy a season pass. so we have literally two-thirds of our guests still that we can sell season passes to. so we're looking to do that very actively and we have programs to do that. >> how do you get them how do you bridge that gap is it income levels or lack of marketing? >> no, i think we have very targeted marketing and that's why our active base has been growing and we've had seven record years but we're targeting them more effectively. direct marketing, either outside or inside the park and we look to drive that growth. >> is it facebook or instagram i remember on the back of the coca-cola can you could get -- >> yes we still have that but we have social media and that's why our

active base of pass holders is up 12% never been higher in the company's history. >> $463 million in your share repurchase program. >> correct. >> so how actively do you think you'd be in the market some people think that's a natural floor for the stock. is that a right way to view that >> this stock, since i met you guys on your show five, six years ago, the stock has gone from $15 up to almost 60 today we have taken returns -- >> it's better than ge. >> yes, i know they've gone backwards we've taken returns up ten-fold. that's over seven years. the market is up maybe three-fold we have initiatives that we think will continue that trend we have a project 750 for 2020 which if we deliver that, which we're intently focused on doing, we'll add about 2.5 billion to our market cap our dividend today with the stock price increase is 4.5%

you have the perfect combination of earnings growth, cash flow growth and great dividend. >> what's your favorite ride >> it's like asking me which of my four children is my favorite but if you force me to choose i would say that there's a ride called el toro. >> i love that ride. >> you get the head rattle on that one. >> and at magic mountain, l.a., that's the coaster capital, literally, of the planet they have a ride there called full throttle. you need to try it. >> great straight in the man who knows. >> thank you, jim. elmeco thank you. your daily dose of street talk is next (baby crying) (slow jazz music) ♪ fly me to the moon ♪ and let me play

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annualist recommendations on the stocks you need to know about. we kick it off with comcast, saying comcast should buy verizon, the analysts advising that the benefits of a merger would be strong. three, verizon is likely to be a beneficiary of wireless consolidations comcast could see potential up side if tax reform takes place. >> it would be a 500, $600 billion deal >> it would be enormous. >> i have a feeling we might cough it. stock two, biogen, they raised a price target to 338, the stock was already above 288. biogen boosted its outlook, you notice i cut that short, it's like a -- they cause it amight be, a drug for alzheimer's, one

of the first disease-modifying drugs, and golden raises its peak projection on amab, also overall biogen has a underlevered balance sheet and on "power lunch" we talk about domino's pizza, raising the priors target to 220, the analyst likes the stock's business model despite increasing business pressure, the believes the recent pullback is an attractive buying. >> the ticker is cald, a software company, pretty high, with a buy and $29 target, we see the company can joe leverage a leadership position, and sales performance management space the analyst thinking the totally addressable market could grow around 12% a year, to around $10 billion, also it's set to grow

in other submarkets. pretty -- >> there you have it "street talk," michelle. the countdown to the fed decision, rate hike not expected, but clues about when the fed will start unwinding that massive balance sheet that's what investors are hoping here today the decision and analysis, live at the top of the hour. plus the cameras are back on 'lbrg white house press briefs. wel init to you live when it begins. don't move ♪

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all right, get excited what will that decision be what will the language mean? what will they talk about reducing the balance sheet joining usdanielle martina-booth, scott miner guggenheim, and david kelly,

chief global strategist for jpmorgan by now everyone knows who you are, because there's no time left for the segment scott, first to you, you know you have to bring this up you say that's not true. i want you to respond to the audience and your clients that are out there. >> sure. mark and i have been together for more than 20 years we're good friends, and we founded guggenheim together as business partners. to be honest, i don't think that i would be as successful today as i've been without mark as a partner. i think mark probably feels the same way so the stories are completely unfounded, and, you know, a friend of mine over the weekend reminded me, you know, that this is part of the price of success. i'm sure if we were a $5 billion asset manager, nobody would be talking about this, but you

always have detractors and people out there who want to take pot shots it's completely unfounded. i'm looking forward to another 20 years on guggenheim. >> i hate on eat the fed stuff, but illustrate to get to that. what do you think the fed is going to do? more importantly what are you investing in and around on the basis of what you think they are going to do? >> brian, i think the first thing is they're going to telegraph something about communication, about the balance sheet in september, and basically let us know that they're on hold until the end of december for another rate hike in terms of what we are doing, you know, given the market and the fact that the credit spreads continue to tighten up risk assets become more and more expensive, and we're upgrading the quality of or portfolios and recognizing we're not getting paid to be exposed to as much as high yield and other sensitive

instruments. >> if you telegraph you're going to do something, why not do something? >> today is their opportunity. it's an opportunity to salvage a good deal of credibility there's not a snowflake's chance in hell they're going to mention the balance sheet today, but again if policy makers want to stand behind this fed-speak, and the minutes, two iterations of minutes, put the language in a statement today. put it in. >> david, if the fed acknowledges that inflation, getting to 2% has been a slog, and hasn't happened the way the fed thinking, and they don't mention the balance sheet, is that basically a glide path for stock toss go higher >> i think there would be more than that, because they'll talk about inflation is not as high as they thought, but the on -- the reasons for normalizing the balance sheet are just as strong as they were i think they may go for the record for the fewest words

changed, because i think they want to keep people on the perception they're going to start typing, not raise rates in september, but announce a reduction in the balance sheet starting first of october. >> the over/under is nine words. >> they're really building the drama. >> you know, there might be some drama. let's get to d.c. and steve leash man with that fed decision steve? >> no change in the federal funds rate they maintain the fund rate. it did not change the balance sheet reinvestment policy for now, but hints very strongly that a change is coming soon the fed said in its statement that it currently expect to be implementing a normalization program, quote, relatively soon, provided the economy evolves broadly as anticipated originally it previously said that policy was coming this year, so tightening it up to saying it's coming relatively soon and the current policy is, for the time being, end quote, only

they expect conditions will evolve in a matter that will warrant gradual increases, and that funds rates will remain below levels expected to remain in the longer term it was a eye nan muss decision, no dissent neel kashkari was indeed on board. it said it declined and is running below 2% i'll point out that the word "somewhat" is missing, sort of downgrading it just a hair is it expected to remain below in the near term, stabilize around 2% in the median term economic activity rising moderately, job gains they say have been solid upgait tro household spending and business fixed investment continue to expand and the risks are roughly balanced while the committee continue

toss monitor inflation that's it, i think david kelly, which i heard before the statement came out was right not much change, but the key is that investment policy change will happen relatively soon. i think that's wink/wink september. the dollar index has gone negative danielle, does that mean this is a dovish statement. >> i think it will be interpreted as a dovish statement. this is a shot across the bow, which is unusual for a fed statement that does not have a press conference following it. this is the first mention in the statement as opposed to the minutes of the balance sheet i think that's significant i applaud the fed for taking a stand. >> i'm sorry can i just correct that? it said in the last month's statement that they would be changing the balance sheet policy this year now they're saying relatively -- >> so it's the second reference. >> david kellie, 11 more words in this statement that the other one. you win the "power lunch" mug.

scott miner, back to you, the dallas, let's go into that more. we've been hearing about the expectations how are you aligning your portfolios, base odd your expectation for the dollar >> i think, brian, what it's basically telling us is that the fed is dragging its feet they originally, you remember just a few months ago, everybody thought we would get the rate increase in september. now we'll toy with the balance sheet. clearly the fed is tell graphs that it may want to slow down on tightening if inflation and labor doesn't play out the way they expect, and so i think that's all dovish. i they are as the dollar weakens we'll see upward pressure on commodities, but the flip side is it's hard to play for the inflation play, even with a weaker dollar, because we're not seeing it come through critical parts of the economy >> do you think mids yellen wants this job, wants to be

reappointed? you think she will >> that's a great question i think that she's open to being reappointed, but i think she wants to be reappointed on her terms, and that she doesn't want to feel that the administration would see her as some sort of low, low interest rate puppet, which you know, if you read trump's comments this week, he made comments about the fact that he liked low rates and that he liked yellen for that reason. >> she's a low rate person, thank goodness she's not a low energy person, something they've said on other occasions. >> that's an interesting point that could prevent her from taking the job -- go ahead, steve. you're our scuttlebutt person on the fed. >> one order shy of scott saying they're dragging their feet on the balance sheet thing. remember a couple months ago, the market expectation was for the balance sheet reduction to be a mid-2018 event. that came back to december and

september. the only reason -- there's two reasons why the rate hike's been pushed back into the future, one is that inflation has come down and stopped moving towards the fed's goal, but the second is because the balance sheet moved. i'm lost as to why scott would -- this is exactly on track with what is a new more hawkish outlook from the federal reserve. >> let me answer that directly, steve. i meant they are dragging their feet on increasing rates, not on the balance sheet. i think what they have done in the market's mind is they have -- they pushed the balance sheet agenda forward so that they can delay rate increases, but i never -- >> i really don't think there's -- >> what's interesting here is that the market is the one that has downgraded the fed's outlook even before the fed did. i've got a look at it now, but going into this meeting, the probable of a third rate hike

this year was 40%. it had been above 50 even without the fed speaking, the market downgraded the outlook in part because of the inflation outlook. >> david kellie, you want to weigh in here? >> i think the market is reading this wrong one of the reasons the fed feels comfortable raising rates in december is because of a lower dollar, but they don't want to say that they don't want to start talking about the dollar, because that could be throwing a fox in the henhouse here. i think it's very deliberate they're saying, look, we're going to get going on this balance sheet reduction, i think they will raise rates, but they just don't want to say -- because they don't want to encourage foreign exchange. >> danielle? >> i think the market is still not necessarily comprehending what the meaning of quantitative tightening is, because that is what it is to yew peter boockvar's terms, it's allowing the balance sheet to start shrinking -- >> in what way is the market not understanding it because we're at record highs?

>> no, no, not the stock market. i think that the bond market is not going to sit up and just take the fed set it's going on autopilot. they're talking about quantitative tightening as if the bond market will be fine with it. i don't believe that this will be the first central bank when you have quantitative easing globally running at a report-setting pace. this will be the first to allow one security to roll off their balance sheet. i don't think the bond market will like that. >> hasn't the bond market been acting that way, because inflation seems to be nowhere in sight? >> the bond market in my view is calling the fed's blouf. i will believe they're going to shrink the balance sheet when i see it >> one thing very quickly. the fed has taken the market by the lapel. it is shaking it hard and said we are going to reduce the balance sheet, and the bond market, to my surprise, i agree with danielle, to danielle's surprise i would also add to the fed's

surprise, has not reacted. there may come a day that it's going to happen, but you can't say the market doesn't know about this >> it's taking its cues from the stock market, because the stock market doesn't believe it's going to happen anytime soon. >> exactly >> i believe -- >> we've got to go guys -- >> why doi saw that, melissa >> we have to go we have to go. >> every single time they come out with a statement it seems like they're catching up with what the stock market is anticipating in terms of expected fed increases. >> you're saying, melissa, the market does not believe what the fed just said very explicitly, or as explicitly as it can -- >> no, the market does believe it's going to happen it's just not at the pace that the fed believes it's going to happen. >> the market is too complacent about that. >> yeah, but they don't believe it at the end of the day. >> if it brings it at this pate you'll see higher long-term interest rates. >> i tried and failed.

thank you all to everybody bill gross of janus henderson. the layman's questions might be out there if you're thinking what does it mean for my money is the reduction of the fed balance sheet whenever it happens, is it going to bring down the stock and/or bond markets? on. >> well, not at the pace they're talking about, brian even fed officials have talked about, you know, reducing the balance sheet akin to something like watching paint dry. those are their words. so, you know, 6 billion a month perhaps moving up to $10 billion a month, what is that? like 1% to 2% of the fed's balance sheet per year, so it's more symbolic than real in terms of its effect on the market, but i do think that the fed is now off of raising short-term

interest rates, that is fed funds, maybe not even in december, and that they're on to reducing the balance sheet because they want to -- a positive yield curve a positive yield curve is very important for bangs that pre-equiadvertises their equity. a lot of positive benefits from a steeper yield curve, as opposed to a flat yield curve, which can ultimately produce a recession. balance sheet as opposed to raising interest rates is what we are looking, in terms of the future. >> that's really interesting listen, i'm not as smart as danielle we talked with q.e. for 50 years, now it's qt, quantitative tightening if i'm hearing right, there likely won't be another rate hike this year, but the same policy objectives may be accomplished simply by that slight reduction in the balance sheet? >> well, not exactly, because -- >> if i'm wrong, say sullivan, you're wrong

[ laughter ] >> i think you're exaggerating my point what i tried to say is yes, they're moving from racing short-term interest rates to reducing the balance sheet, but reducing the balance sheet isn't significant in terms of the amount they are proposing to do. what they're trying to do is keep that yield curve steep. that will do that, because you know, they basically sell ten-year treasurieses into the market and don't raise short-term interest rates. i think it's important in a levered economy not to have a flattening yield curve, and i think the fed is beginning to believe thats ujtsds speaking about the short end of the curve, bill, the very, very short end. back during the last debt hike drama, the debt ceiling, you were one of the most sane refreshingly sane voices out there. remember with all those t-bills were selling off, my gosh, the

government may default, and you said i would buy every single one of those it's happening again, bill when you look at t-bills that are due in october versus t-bills that are due in january? you can see interest rates are rising fairly sharply relative to the ones due in january do you think the same thing here is this another silly move on people who might be selling these t-bills around this time about a possible debt ceiling debate >> of course and they're doing it for regulatory reasons certainly institutions, even under technical default for a day or two, you know, can't bear that burden, so they avoid those particular maturities on a regulatory basis it's obvious the u.s. treasury will not default on treasury bills, no matter they race it or not. i suppose investors can take

advantage. there's not much there in terms of yield, but it provides -- there's no real risk there at all. >> i love the idea that you run a fund called the unconstrained fund i want to be unconstrained, like zukerman, unbound. do you see any on the horizon that would change the composition of your portfolio, which is very short duration is there anything out there that would change that, the credit quality, the u.s. versus foreign composition of your fund >> yeah, i think there is, but it's hard to measure let's put it this ay all risk assets are extremely overpriced, all spreads are extremely narrow, and so in that type of environment, it's hard to make money. the risk, as i see it, that isn't being measured into the vix, or isn't being measured

into the treasury volatility index is basically a geopolitical risk. not because we have seen political risk over the past few weeks and the on market seems to shuck it off how do you measure that? how do you measure north korea or china or syria or the middle east but to some extent, if something happens geopolitically, i don't think that's factored into the market, because a geopolitical risk always deserves a risk premium. to my way of think those risk premiums are not in the market not in the bond market. >> i mean the vix is -- 25-year low, and it may close at an all-time low without it being fake news, can you see the market is at an all-time calm. when you hear all-time anything, that's when i get nervous. are you nervous? >> right based on those prices, yes

wasn't it rothschild that said buy when there's blood on the streets. what you described is the opposite, the streets are squeaky clean. volatility is low. >> is that why 73% of your fund has maturities due in less than one year is that a reflection of that >> no, that's a structural type of situation in which it almost always has one to two-year maturities, then overlaid, you know, with quantitative types of derivatives if anything inn time to to be buying volatility i would think something unforeseen is going to happen. >> bill gross, thank you very much always good to see you rick santelli is watching all the action after the fed's report from chicago. >> i tell you, tyler, my

observation is if you look at the dollar index we had nice movement it was up a bit flirting with slight gains we're down to about a third or quarter of a cent now. the short end moving a biff. steve leash miesman was right, o the back months for the fed fund futures. >> every tick up is diminishing what market expectations are of a fed rate hike, but i still think that the biggest, most unspoken of the story is that liquid is a global issue i don't really think the markets are ignoring the nothing of balance sheet tightening i think that show me, i'm from peoria if the liquidity that we are diminishing or will diminish is made off or offset by other fire hoses, net net, the reason the market doesn't care is because the market doesn't notice. when the ecb or bank of japan does less and we do less, and

there's actually less water on the geraniums, then we can see if they wilt or not. i think that's what the market is looking for i don't think it's a messaging issue. i think it feels bulletproof, because everything the fed will take away -- >> that would be an explanation, rick, thanks, weighing in on that discussion earlier. thank you very much. here's what's coming up on "power lunch." the cameras are back on at the white house, special the press briefs job just a few of the topics likely to come up we will bring that briefing when it begins. facebook set to report earnings after the bell today should you friend the stock ahead of results, or has it run up too much? the big bit of etfs, the industry has swelled with more than 2,000 etfs trading in the u.s. could there be a bubble brewing. we'll talk to the head of i shares, that and much more

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live as soon as it begins. meantime, an update on a story we talked about early about fox-conbuilding a factory in wisconsin this is a -- a world leader in manufacturing for computers, communications and consumer electric tongs at the white house for a technology manufacturing initiative announcement that will bring jobs and billions of dollars in investments to our country i've spoken to some officials, saying racine is a likely location for this. we equate foxconn, apple is just their biggest client. >> the reason we bring it up is president trump has said that tim cook promised him three manufacturing facilities so who knows >> eight lords aleap-in'.

>> 15 years ago barclays began offers the first-ever bond etfs. today they're a $700 billion business and growing bob pisani joins us with that story. hi, bob. >> melissa, 15 years ago, the very first bond etfs were started. martin small, he runs ishares, which of course is owned by blackrock. hard to believe 15 years ago, and yet the business has grown exponentially. blaunched in july of 2002. but in a.

>> some have argued the business has gotten too big, but your point is, and this is part of the industry, it's a very small part of the industry, in fact bond etfs is less than 1% of the entire bond market, and stock etfs less than 8% of the stock market value. >> yeah, the capital markets are huge we've got $170 trillion of stocks and bonds all over the world. there's also a whole array of index exposures everywhere it trades $186 billion a day on exchange the ten-year treasury future trades $146 billion a day. those index exposures are key to how capital markets work, and enhanced price discovery. >> how much bigger, though where can we go from here? less than 1% of the market where will we be >> i think we can double, or maybe more fixed income moves from the byzantine over-the-counter market on exchange. >> more electronics bond

trading? , what hall in equities in may of 1975 that connected wall street and main street, that made mork accessible, and the etf will be the thing that moves it -- >> it's michelle here in studio. i wanted to ask specifically about the bond etfs, i appreciate they're a very small part of the market, but there is a part of the market over and over again we hear regulators are concerned about, an etf trades very rapidly, but when it comes to bond etfs, a lot don't trade as rapidly, sometimes not even on a did ily basis. sometimes they're just not as liquid, and much more worried about mismatches in that particular area of your business is that anything to be concerned about? if i'm ran owner, am i getting the right price, for example >> the regulators are very much turning the tide is turning on this, in the sense that people are studying, and what they're seeing time and time again, when the bond market needs more

liquidity, the fixed income etf will be the go-to market tool. >> we look at the taper tantrum, the third avenue fund, it was bond etfs that enhanced risk in the system liquid is getting better it trades a billion on exchange. no price slippage, that's more than walmart trades. >> it's not the actual etf what about the underlying assets that actually don't move nearly as often >> so the high-yield bond market trades several billion a day in over-the-counter markets, and the e teismt f is trading, cdx is adding high-yield -- there's a big robust ecosystem it's actually making bonds price better, and as we have more etfs, i would argue it will amplified and help grow the bond market. >> i want to run a bite on the

air. carl icahn had a rather stinging comment about what blackrock and what etfs were doing to his bit. i want a quick response from you, martin. >> i think plaquerock is an extremely dangerous company. what is happening is very dangerous in our markets today as larry said, high yields are now $1.5 trillion. $450 billion of that is in etfs and what have you. more importantly, they're overpriced >> is your company a dangerous company? larry was going apoplectic on it. >> our company is not dangerous. our company is helping the high-yield market trade better there's a lot of chicken little there. on that very day, i think i mentioned was one of the largest daze and crazy we had. what we saw again was time and

time again, it was the etf, the had. y. g the release valve for it it's a price discovery tool, making markets better. >> that's for sure martin small, head of ishares, thanks very much for joining us. >> thanks, bob. >> back to you i do wonder, guys, does management matter anymore? if all stocks are in etfs, and keeps getting inflows, does the ceo or management matter the stock could go up regardless of how well the company is executing, simply because it's in a bunch of etfs good question. but i got the wrap ahead on "power lunch", you're all waiting for this, the white house press briefing there's a podium somebody will be occupying that podium in the meantime blue apron in a snap, it inning to lose investor money, will it hurt the ipo market we'll talk about that and eagrt and powerful herb greenberg is

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the shift towards electric-powered vehicles is accelerating as the car industry feels the pressure to meet -- >> we have to get rid of petrol and diesel cars to meet our targets. french authorities ordering evacuation of 10,000 people. fires began raging along the coast on monday where tourists from france and elsewhere always flock each summer. a fallen officer gave his life in the line of duty, now has given life to a beautiful daughter the widow of detective lu welcome baby angelina on july 25th, nearly three years after his death. she was conceived from sperm retrieved before the officer passed away. a beautiful baby that is the news update this

ho hour. >> i love her stocking cap. >> so sweet. let's look at some of the movers now lower despite being on earnings and raising a full-year guidance amgen also moving lower after full-year guidance was lower than analysts expected u.s. steel on a tear, as eps and revenue blew past estimates. it's up about 8% the semis on the move, the group being led higher by amd. well, the oil market is closing for the day. let's go to jackie deangelis at the commodity desk. >> good afternoon, brian we're looking at oil prices, about ten cents off the remember, this morning's doe inventory report showed more of a drawdown, and a slight downtick in u.s. production, too. that was boosting the market, get close to $49 a barrel at one point.

that's the draw that you norm ate see during the summertime that we haven't seen traders liked that at the same time add to the fact that the imf numbers the other day, given the market optimism that demand is improving that's not to say that prices will stay elevated, but at least for now there is some support. the dollar index remaining complimentary. finally the saudis, telling us that exports will come down in the fall, something the market already knew, but reinforcement was positive here, so trading just around 48.78 at the close back to you. thank you very much, jackie. facebook is set to report earnings, the stock has been on the tear, joining us on what they're expecting from this afternoon's report, michael graham, dan morgan, guys, good to have you with us. at this point with the stock up so much, has this become sort of a show-me stock, in that they have to prove to investors that

they can continue selling ads at the rate they've been selling them at in order to propel the stock higher >> that's key, too the big issue coming in is that their ability to move forward to that next leg of growth. that's what everybody is waiting for. they have already said they can't continue to keep cramming ads into the news feed two areas to focus, one will be video in terms of how that is coming along, and also in regards to instagram those are the two key area for them instagram should do about 2.8 billion in revenue, so it will be how well those two segments are doing in regards to how we'll judge this report. >> instagram already is expected to drive a lot of the revenue growth in the future, michael, 20% revenue growth potential over the next three years or so. story is an important feature here do you believe that there's going to be the handover from

the ads on the platform itself to ads sold on instagram, ads sold in video. what will you be looking for, that they are ready to do that >> yeah, i do think that instagram is an important part of the story going back to facebook in total, though, they do have a multifaceted revenue growth. they're still grows users in the low teens, still expanding engagement we mentioned the ad load is moderating a bit, but ad pricing is also still expanding so three of the four key growth drivers are still very much intact and i totally agree with dan, that instagram is important we think the ad load is still really low, and we think instagram pricing is also very low, and that has a lot of room to expand. one other quick thing to mention is facebook messenger is now starting to see more advertisements they have opened up messenger

inventory to all advertisers now, so there's a lot of good things happening emplgts could i do a translation moment facebook just can't stuff any more ads down the newsfeed, that's the bottom line here? where is growth going to come from it can't on necessarily come from there unless they get more pricing? >> i think they can still grow the user base and still grow pricing, and those users are getting more and more engaged, so there are plenty of ways to knock ad inventory without actually increasing the advertising load on any particular user. so they're doing all those things pretty effectively. how do they start making rae money for whatsapp >> that's the challenge going

forward to get that next leg of growth, in order to monetize that >> guys, i'm so sorry, we've got to interrupt we are going to go to the white house to sarah. i know you both have been waiting for it. >> last quarter the president's salary went toward the restoration of two projects at a national battlefield after his donation, additional donoring quickly stepped you want to bring the total gift to over $260,000. in this quarter the president will be donating his salary to the department of education. and with that, i would like to bring up secretary devos to tell you about what the department will be doing with the president's money to help equip the boyce and girls. secretary devos, it's moot pleasure to present a check for $100,000 to the department of education.

>> thank you so much, sarah. i want to say how grateful i am for the president's gift he's committed to our nation's students so that every child, no matter their zip code, has access to a high-quality education. he and i have had many conversations about how best to put students' needs first, and in short we are setting them up for a lifetime of success. there's much work to be done, but we are certainly on the right track thanks to the president's leadership just yesterday ivanka and i hosted a summer reading event, where the focus was on getting young girls age 6 to 10 excited abouts learning science, technology and engineering and math it was fun to see their eyes light up as they got to explore, create and experiment in a collaborative environment. today's and tomorrow's economy requires students prepared for stem careers that's why we've decide to do

use the second quarter salary to host and stem-focused camp we want to encourage as many children as possible in the hope that many develop a passion for these fields we look forward to an exciting endeavor and i thank president trump again for this generous gift thanks >> thank for you coming and being here for that today. now, i know anthony is probably a bit disappointed he's not up here today, but since he did some tv this morning, he was able to get his hair and makeup done, so i think he'll about okay we're looking to mixthings up bit. fingerprint i would like to give us a reminder which i imagine is because we love our country and want to make it better

i've spent a lot of time around the president and know exactly why he's here. he's tough, a fighter, a strong leader, and somebody who deeply loves this country today i'd like for you to indulge me and tell you about what that means for me to the best of my knowledge, i am the first mom to hold the job of the white house press secretary. that says less about me than about this president it's not just with personnel, it's about people and it's about policy empowering working moms is the heart of the president's agenda, particularly when it comes to things likes tax reform. i have three children, and the olders, scarlet, starts kindergarten in a few weeks every time scarlet and every little girl in america should grow up in a country where if we deliver on the president's agenda, better jobs, better

health care and better tax system, that incentivizes witch as a working mom it's not lost on my what a great honor and privilege it is to sand here at the podium i will always do my best to truthfully answer your questions and deliver the president's message. jonathan, i will preempt you from asking that question later, but i hope to send my daughter a message and to every other kid in america -- don't listen to the critic, dream big and fulfill your potential, because in this country you still can. to remind us more often about some of the forgotten men, women and children that we're hear to serve, we're going to start the white house briefing every once in a while with a letter or e-mail we may receive from some of those individuals to kick it off with that process, i would like to read you a letter from 9-year-old dylan -- my name is dylan hashen, but everybody calls me

pickle i'm 9 years old and you're my favorite president i like you so much my cake was the shape of your hat. then dylan goes on to ask a few questions. how old are you? 71 years old how big is the white house? the white house is 168 feet long, 70 feet tall on the south side and 60 feet 4 inches on the north and it takes 300 gallons of white paint to cover the exterior of the white house residence. had has 132 rooms and approximately 55,000 square feet how much money do you have dylan, i'm not sure, but i know it's a lot i don't know why people don't like you. >> me either, dylan. you seem really nice, can we be friends? i'm happy to say i spoke directly to the president, dylan and he will be more than happy to be your friend. my picture is in here, so if -- dylan i hope you're watching

your friend, dylan dylan, thanks for writing to the president. if you're ever in washington, d.c., i hope you'll stop by and let us show you around the white house. with in a, i'll take your questions. >> jeff sessions was here today. what was he doing here did he meet with the president and what does the president think about the conservatives rallying behind jeff sessions, sailing he's essential in this office >> the attorney general was here for other meetings, not with the. it was a principals committee meeting. i think the president has been very clear about where he is he's obviously disappointed, but also wants the attorney general to continue to focus on the things that the attorney general does he wants him to lead the department of justice, he wants to do that strongly. he wants him to focus on things like immigration, leaks and a number of other issues i think that's his focus

>> if the attorney general launches a leak probe, would that help his status with the president? >> i don't think that's the, you know, nature of the relationship again, i think that the president is disappointed. he stated that, i don't think there's anything more to add at this point >> sarah, thank you. a couple questions about the new policy on transgender service members that the president announced this morning first, what happens to transgender service members now? are they immediately thrown out of the military? >> that's something the department of defense and the white house will have to work together, as implementation takes place and is done so lawfully >> so it's possible -- i see the president was pretty clear in his tweet that transgender individuals, he will not accept or allow a transgender individual to serve in any capacity does that mean that those now this theater that are now deployed to afghanistan, for example, will have to be

immediately sent home? >> again e. implementation policy will be something that the white house and the department of defense have to work together to lawfully determine, and, you know, i would imagine the department of defense will be the lead on that and keep you posted as that takes place. >> why did you decide to do this gin during the campaign he declared he would protect the rights of transgender individuals? he said he would be better on this issue than hillary clinton and now has tornado the clock back >> the president has a lot of support for all americans and certainly wants to protect all americans at all times the president's expressed concern, since this obama policy came into effect, but he's also voiced that this is a very expensive and disruptive policy and based on consultation he's had with the national security team came to the conclusion that it erodes military readiness and cohesion and made the decision based on that. kevin? >> thank you, sarah.

if i could follow up on what jonathan just said, the president tweeted thank you to the lgbtq community, i will fight for you while hillary brings in more that will threaten the freedom does this shift in policy protect transgender americans? and what is the message that he is attempting to send to them by making this shift in policy? if i could follow on the health care. >> let me an that first question, then we'll cub bam that decision is based on a military decision. it's not meant to be anything more than that and simply about obviously a difficult decision it's not a simple one, but the president feels it's the best one for the military >> okay. on health care if i could follow quickly, can you repeal or replace the affordable care act and still protect medicaid funding? we're talking about the most dependent among us and the need

for medicaid is great. that seems to be a major concern among some lawmakers including his roa murkowski. from the president's perspect e perspective. if congressional lawmakers do send a repeal that does not protect medicaid funding, is that something he would still support and what is he doing >> the president is clear he's been wanting to protect those part of that program, but also very focused on repealing and replacing. we are working through that process, excited about the progress that was made yesterday, and we're going to continue to push forward unit we get a new and better health care plan. >> thank you, sarah, one short thing and then questioned, can you provide us with a copy of the letter even hold it up. >> sure, i will be happy to. i'll knock out dylan's last name, but i'll be happy to provide it. >> you said he didn't meet with the president. has he spoken to the president this week? do you know when the last time

the two of them spoke was? >> i don't believe they've spoken this week i'm not sure on the time frame. >> another follow-up on jeff sessions. >> always. >> you said the president has been very clear about his epps on jeff sessions yesterday the president said he wasn't leaving him to, quote, twist in the wind, but he continued to tweet about him this morning if he is still frustrated and so disappointed, why doesn't he ask him to resign or fire him. >> look, you can be disappointed, but still want someone to continue to do their job. that's where they are. >> will he continue in that job? >> i think i made clear at last week if there comes a point he doesn't, he will make that decision mike. >> if you could clair if comments in the "wall street journal" interview yesterday about tax reform -- the truth is the people i care most about is the middle-income people who have gotten screwed.

if there's upward revision it would bed on high-income people. what exactly was the president talking about? a revision from they plan on the personal side of 35% or revising it up from the current tax code? >> when we get ready to walk through the full details of the plan, i'm happy to do that at that time, but right now we're focused on the three big priorities of the tax reform -- a simple fairer tax code, middle-class relief and creating jobs we're continuing to work through the process. >> reporter: a more general question on that -- does the president believe that the wealthiest americans deserve a tax cut? >> i think the president is looking and prioritizing middle-class tax relief. he's made for secret about that. that's one of the biggest priorities of the three things he's focused on. >> jordan? >> reporter: thanks, sarah the president ha has had almost 24 hours to review the russia's

sanctions legislation, has he decided to -- >> it's more complicated senator corkers came out and said he's not fully supportive of where the bill stands we expect there's a possibility more changes take place, and set looks like before we make a final decision, but i can tell you that the white house, the president, and the entire administration as we've said many times before strongly supports sanctions against russia, iran, and north korea. >> is the president considering looking at any kind of policy about transgender people serving in the white house now that he's tried to make a decision >> once again, this was a decision based on what was best for the military, and military cohesion, and on the council of his national security team go ahead, major. >> so the impression you get was a little bit flat-footed by the president's tweets as i understand it, this was -- has been for the last couple of

weeks of conversation here specifically about tricare coverage or transgender procedures and it suddenly evolved for the president to then go on twitter to announce this ban and as you already told us, the white house and the pentagon are going to have to lawfully implement that tip cl when you have an announcement of this magnitude, all of that work has been done at the procedural level between the bureaucracy of the pentagon and the white house. why wasn't any of that work done and why was the pentagon caught so surprised this morning by the president's tweets on it >> as i said before, the president's national security team was part of his consultation when the president made -- right, when the president made the decision yesterday, the secretary of defense was immediately informed, as were the rest of the national security team. that had been part of this ongoing conversation >> but you can't answer the question of what's going to happen to transgenders who are in the military now. should you have been able to

answer that basic question, that policy of this magnitude >> look, i think sometimes you have to make decisions and once he made a decision, he didn't feel it was necessary to hold that decision, and they're going to work together with the department of defense to lawfully implement it. >> one last thing on sessions, just because this is the baseline question, you said earlier the president was frustrated is that frustration now in the past and does he fully have confidence in the attorney general to carry out his duties from this day forward? >> the president wants the attorney general to focus onhi duties as attorney general, and i think we've both spoken about that pretty extensively, i don't have anything else to add. >> you just announced the president is donating $100,000 to the department of education, clearly must care about education, why then is he calling for $9.2 billion in spending cuts to the department of education in the next budget? >> look, i think that oftentimes you have a lot of duplicative efforts, and they want to streamline the process, and we

simply have a government that's completely out of control. we need to make things so that we have a balanced budget. the president campaigned on it, he's committed to seeing it through. he's committed to education by his own personal commitment and looking for ways we can save and continue on to make education better, passing some of that decision-making down to more local and state control. >> in june of 2016, in the heat of the campaign, he wrote, thank you to the lgbt community, i will fight for you did the president today just betray his commitment to the transgender community? >> no, as i answered before. this was a decision about military readiness and i already answered to that specific tweet >> transgender community he is still committed to fight for them and how is this not not fighting for them? >> i think the president has made clear he's committed to

fighting for all americans >> was this decision on transgender in the military made to put pressure on democrats running in 2018? particularly democrats running in socially conservative districts in ohio, michigan, and wisconsin? >> not that i'm aware of >> just to follow up on that, what is the time line for when guidance will be delivered on. >> asking why the attorney general has not fired andrew mccabe why hasn't the president fired andrew mccabe? >> the president's made an incredible nominee in chris wray and he's looking forward to getting him confirmed and taking over the fbi >> why should attorney general sessions fire him? >> he's made a choice to leave that agency. we're looking forward to getting him confirmed. >> two questions, one following up with tricare and the transgender community. there's been a concern from the

transgender community for president trump against president trump that if obamacare versus trumpcare they're wondering if they were able get procedures to help them to complete their phases of becoming the other gender. maybe some who already have part of the change and want to do the change and scared of what's happening now. not for certain. this was about resources within the military, and nothing more guys, i really don't have anything else to add on that topic as i do, i'll keep you posted but if -- if those are the only questions we have, i'm going to call it a day, but if we have

questions on other topics, i'll be happy to take them. >> sarah, i'm sorry, sarah, i wanted to finish everyone had a second question how is the president working with the cabinet secretaries right now? how does he build them around after all of this with sessions and we're hearing things coming out of rex tillerson how is the president working on their moral? >> i think the same way he works with all of us he empowers us to do our jobs. the moral is high. >> not here in this country, but overseas and there are 18 countries where transgender service members are

allowed to serve openly, uk is one, australia is another, israel is a third. the president's tweet referred to disruptions what does he mean? and is he concerned that there are disruptions in our ally's military and australia and the uk and israel and should we worry about that from a military standpoint >> as i've said earlier, this decision was made after extensive discussions with his national security team and the president decided it was in the best interest of the military to end this obama policy. i can't speak to anything about another country, pretty focussed on making sure we get good things happening here, zeke. >> why hasn't the president picked up a phone or invited him into the oval office does the president have any intention of speaking to the attorney general this week >> i'll keep you posted if he does >> second question on the transgender service member issue, you mentioned the president reached this decision to improve or maintain unit

cohesion how does it maintain or improve to leave thousands of service members, some who may be overseas, serving in units overseas in the dark about their status with the military >> once again, this was a decision made after the consultation with his national security team, and decided the best decision. alex >> the house and senate are hoping they'll join him in pushing forward a lot of the policies that most of these people campaigned on, like repealing and replacing obamacare. i think that's a perfect example of republicans needing to step up to commitments that they made

during the campaign and since being elected, and get those things done. guys, i hate to cut it short the president's got an event as i know you can hear by all of the cheering children, i hope that we can join together and welcoming the boys and girls from the nation. >> sarah huckabee sanders ending the -- >> hold on >> didn't get a single question about the potential announcement at 5:00 this afternoon about a new fox con potentially is what we think is going to happen. >> and some will add thousands, maybe tens of thousands of jobs once it is built >> yeah, but again no word from that white house press briefing, the official announcement expected at 5:00 p.m. eastern time, of course we'll carry that live for you on fast money >> i was also hoping there might be questions about the venezuelan sanctions they rolled out today in an effort to change the horrific situation there,

and the fact that they found one guy with several hundred million dollars of assets all over the world. >> i thought the question hold up the letter was interesting. >> prof to be consistent >> that says a lot all right. thank you for watching "power lunch. >> "closing bell" starts right now. hi everybody, welcome to the "closing bell," i'm kelly evans. >> and i'm bill griffith earnings once again in all force today as it has been this week a number of positive reports powering the dow higher. although we are well off the highs of the session right now after the bell tonight, we have facebook leading the way, we'll tell you what to expect from those numbers, as you saw there, some of the other major preparations with pretty good gains today. >> and dow components, bowing in particular pushing that index higher, it's still up 76