havana rather than cooped up in their circus cages >> i've got the box. >> this is the new box no cages anywhere. >> i thought they were just called animal crackers, but their barnhams after the circus. >> thanks for watching "power lunch. >> "closing bell" will follow it up for you right now time for "the closing bell." i'm david faber in today for wilfred frost. the s&p 500 hitting an all-time high we'll monitor the market as we close today and see whether we can hold that ally i'm leslie picker in michigan how one auto parts maker is getting caught up in the trade war. ahead how this american company may be forced to move production overseas i'm sara eisen in for kelly evans. would you put a microchip in your hand for your job

we'll talk to a ceo that is microchipping its employees. "closing bell" starts right now. welcome to the sleepwalker, david faber, there was a slow walk >> taking my time. >> the s&p hitting a record. first time we've seen that since back in january, january 26th. the dow touching its highest level since february 2nd >> coming up we're going to get details from president richard fisher, and talk about rates and we're also expecting to get more details on that plea deal from president trump's former personal attorney michael cohen. we are of course monitoring the action right there from that courthouse that's not far from here at the

exchange waiting for the latest >> he's expected to appear 4:00 p.m >> but first let's get to those markets. joining us lindsey bell where, investment strategist, and matt cheslock, and rick santelli at the cme group in chicago thank you for being with us today. matt, let me start with you. what should we make of an all-time high in the s&p >> it was waiting to get there with the earnings that came in which were mildly positive across the board we're starting to see a broader based rally we've been expecting this for quite some time, frankly we're starting to see all the sectors take us higher including retail space which is the leader today. >> yeah, i'm glad you brought that up. lindsey, you've been looking at retail earnings. i think you were expecting a good quarter even tj maxx turned higher, what

does that say to you >> i think it gets back to the point the consumer does drive the economy. and if the economy is doing well then the market should do well also wages growing, unemployment at 20-year lows the consumer is feeling very confident here, so they are spending more and that will help push our economy into high gear as we head into the second half of the year. >> rick, any thoughts from your front there particularly as it relates to rates and impact on the market snipt. >> well, it's a big down day for the dollar index everyone needs to pay attention because there's two big forces at work, the residual effects on the emerging market, concerns that arose a week ago, the catalyst being turkey, and the bullish on the index before it ran up despite that deep trade

it's down 1 point and almost 0.3% today it you recall we settle around 92 at the end of last year, stow nice gains in terms of interest rates it certainly seems as though there is no fire to be set on higher rates at this point. you can see it reflected in etfs like investment grade on the iqd or high yield on the hyg they're at four month highs. so right now if complacency is the right word nld be applying that probably to the fixed income arena where the biggest issue seems to be a large number of shorts which really does fit with the way the market's trading. >> yeah. matt, you of course you mentioned the change in leadership to a certain extent i think it's worth noting 40% of the s&p's gain year to date was made up simp lee by the moves of

microsoft, amazon and netflix, if i'm not mistaken. can this leadership really change hands from the bellwether stocks to some of the retail to like pharmaceuticals >> now we're seeing some of the other names a bit stronger the banks are having a good day. obviously jp morgan had some news out as well that's taking them a bit higher. but we're starting to see crowded trading in oil, same with gold. everyone was short gold. now we've gotten to the other side of the boat here and we're starting to see that lift a little bit when you see these sector rotagr rotations it's crowded on one side and has ample opportunity to go up to the other side >> the dollar weakness we are getting some headlines

out of washington on a possible plea deal for president trump's former personal attorney michael cohen. >> that's right. we've got two legal stories here involving former associates of president donald trump that are both real balls in realtime right now. nbc news now confirming michael cohen will plead guilty, not clear exactly what the charges are here but we are expecting that they include campaign finance violations, as you look at michael cohen walking today. there's a hearing at 4:00 p.m. on the federal courthouse in new york on that case. meanwhile in virginia the president's former campaign chairman, paul manafort, is awaiting a decision by a jury that's been deliberating since

thursday on his case, 13 counts there on charges basically in a number of different buckets including the idea of tax fraud, the idea of failing to file bank accounts revealing foreign assets held by paul manafort and some other charges involving his applications from loans from banks and misleading documents involved in all of that. we expect that could happen in any moment because the jury today signaled to the judge they had some questions, and the judge sent them back with more two very big ramifications for the president out there in realtime remarkable history for this administration, and we'll wait and see at 4:00 whether the documents in the cohen case reveal anything about the president's involvement in the campaign financial violation back during his campaign in 2016 what did the president know, when did he know it, will his

name even be featured in those documents? those are questions we'll get an answer to in about an hour's time >> are we going to get any sense whether or not part of this plea deal is cooperating with the special counsel's investigation? >> we could. that's one of the things you often see in these plea deals. sometimes you get an indication what the terms of that cooperation are or have been previously we don't know what that will say. that will give us a sense whether cohen is essentially pleading guilty to charges investigators gave to him. remember that raid on his office and hotel room where he was staying earlier this year, the president outraged about that and the president also outraged michael cohen secretly taped him and released some of those tapes. the question is what are prosecutors going to make of those tapes if they have along

various points along the line in the campaign and we'll have to see what all is included in those documents and any potential collusion in any larger case, david >> i have a feeling we're going to be seeing eamon again in the not so distinct future john, if you want to give it to us in terms of what this means >> well, let's talk first of all legally the president has been in jeopardy that is deep for some time, and it may be getting deeper with both of these cases today. first of all, michael cohen, if in fact he pleads guilty to campaign finance crimes remember through the tapes that have been released publicly by the cohen side, his lawyer lanny davis, we know -- we would know that michael cohen, the president's personal lawyer, very close to him, would have pled guilty to a crime that the president participated in.

that is to say the financing of those pay-offs so as eamon was saying we don't know exactly what charging document will say and whether michael cohen is going to cooperate, testify against the president. we have conflicting reports on that the associated press said a plea deal would come with a cooperation agreement. "the new york times" said it would not. as to manafort you have the chairman of the president's campaign, someone who had been aligned with vladimir putin through his work with ukraine. if he is convicted of bank fraud charges and tax fraud charges, then you would have had the president's campaign chair, the deputy chair, that's rick gates who cooperated against manafort, his national security advisor, michael flynn, and michael cohen all plead guilty to felonies these are people very close to the president. also remember that michael cohen was attempting to pursue a trump tower project in moskow during the campaign

so all of these men have information about the president, about his interests in russia and of course the conduct of the campaign now, even if you assume that no prosecutor, mueller, the southern district of new york is going to indict or prosecute president trump because of the justice department doctrine that you can't indict a sitting president, the political jeopardy is substantial. both in terms of the reaction of people on capitol hill now, the way it might affect the mid-term campaign in which democrats could take control of the congress, in which case he would be subject to a much liar level of political scrutiny. so this is all bad news for the president. we'll see how he reacts, but more importantly we'll see what that jury in alexandria does, and exactly what michael cohen has to say when he steps into court this afternoon >> i want to point out one

thing, john, and that is we've seen no market reaction to this story. sometimes there's a knee jerk sort of reaction to these. there's nothing out there, any kind of smoking gun or anything that even vaguely incriminates him from our perspective at this point, correct and i wonder how hard that is going to be to get there >> no, i would not say that, sara as i was discussing earlier, if michael cohen pleads guilty to campaign finance violations related to the pay-offs of stormy daniels or the discussion of a pay-off with karen mcdougal, those would be crimes that president trump participated in. now, it depends on exactly what kind of crime is stated in the charging documents and what michael cohen pleads guilty to, but that's potentially pretty significant. obviously, the actions that the

president has taken both during the campaign and through in his deputies and taking that meeting at trump tower which the president put out misleading statements on and they've now admitted those statements were -- they've corrected those statements the urging of russia to hack more e-mails and then the actions after the campaign when he became president in firing james comey, which he told our colleague lester holt was over russia, all those things are potential pieces of evidence in either a conspiracy case or an obstruction case or both so there's a lot of evidence out there, but it's not conclusive and nothing -- as you point out, he hadn't been charged with anything at this point so i guess i'm not surprised at the market reaction. but sometimes these things happen in slow motion. >> we'll see what we get later this afternoon thank you for the perspective as always >> another big story today, online brokerage firms all

falling on news jp morgan is unveiling a new service that comes with free trading. let's bring in the first person to break the story and quite a domino effect we saw tell us what exactly jp morgan is doing and why the other brokers are so threatened? >> you have people like robin hood that give free commissionless trading to all basically on a free permanent basis. when they flip the switch-on this service all 47 million people can get access to within about three minutes on signing on on free trades worth about 100 trades a year. >> and other brokerages, balsed on the analysts and other people you've talked to today, are they over reacting or potentially facing a loss to jp morgan

>> what happens now? at most jp morgan charges 295 per trade. so this is the cumodification of their entire business model. you're habituating people to the idea trading should be free. >> i thought we already got there. when it's $8 to trade $10,000 worth of stock, it almost seems free to me >> it's been going on for decades, schaub, e-trade, each of those guys took it further. when you have someone like jp morgan, that takes the ball basically to the end zone. >> yeah, they'll all have to compete. stay with us if you would. let's bring in mike santoli and bob pisani >> so on the surface this doesn't appear to be existential threat they only get about 8% of their

revenues from trading that goes on here. you see how small that is. basically they're a bank they make money on the net interest income and charge fees. there's also that 20-80 rule 20% of the traders do 80% of the trade. i think that underestimates it, i think there's a real problem here i'm concerned about asset gathering. and that's why i think the story is important the ability to bring on and retain assets is the single most important thing out there. if i had a chase account i might have put it into an account to do trading and now i don't have to do that by the way, great story. it got a lot of traction on the street, a lot of talk about it >> what do you think, mike could it increase participation in the markets and how does it change the dynamic in the industry >> i don't know it necessarily introduces people to the idea of trading just because its free.

i remember a few years ago when robin hood did launch, you had the incumbents out there very smugly saying our customers, $8 is no big deal what's the difference between $4 and $8 on top of that in. >> it's a market thing >> but it was steady at $8 for years. and now you're seeing cracks in that you're going towards zero if not zero you're hoping to lock in the accounts, and i think what the shawaws and mera trades will count on are the rewards, it's a whole package. >> the amazonification

essentially of let's charge an initial fee and bring everybody in here and give them all sorts of service, do you think that was really an influence, the amazon model >> i've gone to conferences, and he would mention bazos and amazon literally 23 times each incs -- >> i understand to bob's point you have an account already at jpm. you might typically move money to ameritrade, you won't need to any longer it's not necessarily on what they're making per trade

>> there are other ways to make money besides the actual -- but i think directionally we're going to fee compression i think that's hard to argue >> it totally already has happened and the other way it's anaul gs to amazon is amazon has spent a lot of money for its own technology needs and logistics of it. and similarly with jp morgan they invest billions every year in trading markets and infrastructure markets along the way. and e-trade has always been slightly smaller, subscale versus the other ones. you're going to hear talk it's going to be a consolidation candidate down the road. >> in september -- they already said they're going to make an announcement what's going to happen you'll see incremental attempts to raise fees.

they're still raising fees in some cases >> you have to find your margin somewhere. >> you've given us a lot to talk about. >> yeah, all day long in in fact started this morning, so thank you. thanks of course to mike santoli, bob pisani. coming up on "closing bell" retailers are in focus today we've got reports from tj max and khlos this morning >> plus president trump doubling down on his criticism of the fed, making headlines in a wide ranging reuters interview. next up we'll ask former fed president richard fisher about what could hpeapn when a president intervenes like this in a fed policy. when my hot water heater failed, she was pregnant, in-laws were coming, a little bit of water, it really- it rocked our world. i had no idea the amount of damage that water could do.

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this wi-fi is fast. i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. president trump telling reuters yesterday that he disagrees with the u.s. federal reserve's decision to raise interest rates joining us now is richard fisher, former president of the dallas fed, currently senior advisor.

nice to see you. if you were still on the fed, this is not the first time this is tripling down on criticizing fed policy what do you do >> you ignore him. >> ignore him? >> yes, you do and i'll tell you why. we're in a process of -- the fed is in the process of gradually rising rates they have the room to do so. look at where the ten-year is and so on. there's a robust economy thanks in part i think to the president's tax initiatives and deregulation initiatives but at some point the business cycle will turn, and you want to mitigate the downturn. and the only way to do that is to provide more accommodation which means cutting rates, which are not very high right now. there's not a lot of room on the down side in terms of how much you can cut. i don't know understand what the president is doing here because you want to be able to prolong the business cycle by easing rates when the time comes after

the economy begins to rollover so it's not in his interest, in my view, to criticize the federal reserve. and the recent examples we have is an executive taking over monetary policy, trying to influence monetary policy. zimbabwe, venezuela, turkey. it's happened before and we saw what had to happen afterwards, and besides that we're seeing a gradual rise in inflationary pressures it's above the fed's target right now. so to me this is kind of like monty python's little skit for the 100-mile dash for the challenged i expect understand the leadership of jay powell he'll do nothing >> that was great. you're always great, richard we usually spend a lot of time

talking about fed apolicy and te like, but you were with at&t and pepsico, and oversaw the implementation of the north american free-trade agreement way back when. weigh in here on trade for me, where things stand with nafta which you obviously new fairly well and with china. certainly as a board member of multinational corporations >> well, this again is something that we'll see how it changes. he's got someone on new negotiations now and pressing to get this thing done. obviously our candidate in mexico are big training partners i think the president's right from the standpoint it needs to be updated i implemented nafta for

president clinton for under four years. that was part of my job. i also negotiated with sharlene and for them there needs to be, i hate to say this word, needs to be a reset for both of them but i certainly hope they don't screw around or mess around with the dispute settlement mechanism in nafta because that is one of the key foundations of that agreement. and i'm afraid if they do mess around with that the wto is next now, the wto is slow and inefficient by our standards but it's an important dispute settlement and china, they lie, cheat, steal, but that genie is way out of the bottle. and the question is how do you bring it back in, and i expect

china will offer something big but they're going to have to do to correct the imbalance with china. but that's not the case with mexico it just needs updating >> go ahead, finish up i just want to ask about the markets. >> remember there are 120 million people living south along the border the people that are screening south of the border are not mexicans and we need a stable mexico. again, we don't want turkey on our southern border. as far as canada is concerned they're our major training partners again, let's update this but let's not destroy these agreements record high you mentioned? >> yes, record high for the s&p, again. we are now approaching the largest bull market tomorrow when you were at the fed you were warning over and over again against qe and the fed inflating

asset bubbles and now we're in tightening mode. we've seen a number of rate interest if increases surviving that apparently and reaching new heights. are you surprised to see that or do you think it's overdone >> i'm not surprised first of all, the fed carried the ball entirely until this president was elected. i give him credit for two things one is tax initiatives which have been good for corperates and secondly for deregulating or not re- or additionally regulating the economy they are super optimistic because they don't have the regulatory problem you have to keep growing profits and at some point they slow down but i think the market in my

view is priced to perfection right now. it has some down side potentially and may go on for a while. i don't think the fed is doing some wrong thing the gradual tightening and broadcasting it well to the market through that as it goes through time before the meetings take place and i expect them to continue gradually incremental increases in the fed trade because it looks like the market is going to allow them to do so it could continue for a while, and i'm not surprised because finally we've got fiscal policy to back up the sole job being done by monetary policy. >> so do you think when president trump criticizes the fed that's for fiscal policy and lower tax rates? >> i don't think it's a function of anything. i think he's voicing his frustration perhaps. i think it's a little bit shortsighted i don't understand his criticism

as i said earlier because you want to have something to give back when the cycle turns. we have the long sz economest ec expansion in history taking place right now. and i would be enjoying that and not criticizing the central bank because you send a shiver of fear up the spine of investors when we threaten independents. >> richard fisher, always good to get your take that was good. a lot of people do think, david, that you've got the stronger dollar and higher rates on the fiscal stimulus, it's not even the fed you should be criticizing. we'll check in on some stocks to watch right now. jm smucker falling today after the company reported a revenue miss, food producer citing slow sales in pet food, coffee and oils categories. that stock now down 6%

it's underperformed all year it shows you really the divergence right now in consumer stocks staples not seeing sales growth, especially food makers that are domestically exposed and discretionary, even department stores are seeing much better spending >> well, they aren't department stores but mall based on khols and tjx as well. discovery communications quite higher today actually. the reason at least it would seem they went from a buy to whole, raise price target from 24 to 26, noting a number of opportunities here they can could boost the company's free price flow, script synergies, recent buy backs sooner than expected but no doubt they're happy to see that stock after a poor reversal last year up 32%

now for 2018 >> have the media stocks survived in general? >> yes, even the distributors are starting to show some life the programs themselves have not had a bad year other than cbs, which is somewhat of a different story. >> drama onto itself >> distributor companies all down other than verizon if you want to consider them. time now for a news update let's check in with sue herrera. david, thank you very much here's what's happening at this hour, everyone nbc news reporting president trump's former personal attorney, michael cohen, has reached a guilty plea deal with federal prosecutors in new york. cohen is expected to appear in federal court at 4:00 p.m. this afternoon. the jury in the case against former trump campaign chairman paul manafort remain in deliberations. the jury submitted a question to the judge asking what to do if

they can't come to a consensus on one count nbc news reporting the judge said the jury should continue to deliberate and if they could not come to a decision he would consider the necessity of a hung jury on that one count after a flash flood killed at least ten people in a national park in italy, search and rescue teams continue to search the creek bed for survivors. italian authorities have opened a criminal investigation to see if negligence played any part in those deaths and on a lighter note fans of the dutch football team excelsior, showering patients from a children's hospital with stuffed animals. and the best part, the kids were all fans of the rival team certainly that is good sportsmanship. and guys, before i send it back to you we're monitoring this developing story. a private jet blew out two tires after taking off at teeter borough airport this morning the pilots basically declared an

emergency because that plain was headed to london, it had an awful lot of fuel onboard, so they have diverted it to several airports they are now diverting it to stewart airport, which is in westchester county, new york we do have responders on the see there. it has 16 people onboard, a gulfstream 4 it was on route to the airport. we will monitor this situation and bring you an update in our 4:30 news update they expect that plane possibly in ten minutes back to you. >> all right, sue, thank you still ahead s&p 500 hitting new highs today and it's not the only index moving higher nasdaq on track for its fourth day of gains we'll head up town to the nasdaq marks etfor a look at what's driving it higher when we come right back do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours,

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all right, we got 22 minutes to go before we get to the closing bell you can see of course all the major averages in positive territory. the s&p 500 had hit an all-time high we still there, sara what was that number >> we're in record territory >> are we still? >> we'll check on it but what's the dow doing, your favorite its up 94 points he asks me every morning where's the dow. toll brothers surging today after top estimates but that

e usg rk signal an all clear for thhoinmaet we will explain.

tjx company trading higher today. you can see it right there

oh, there it is, thank you this after reporting being beat on both thotop and bottom line the company also reported better than expected same store sales and raising its full year adjusted profit forecast >> and shares of khols also moving higher, a bit of a turn around today 1.5%, after rorr g reporting better than expected earnings today >> joining us now to discuss all this now thanks to you both for being here let me start with you, just that reaction to khols, in particular it did seem to have a bit of weakness coming out the print itself but then quickly reversed >> it's a quick wall street case of company being beat by 13 cents. they raised their range for the year by 5 to 10 cents. so most people thought conservative guide here for the balance of the year. our view st. pretty simple

khols is a market share gainer the consumer is extremely strong the company has a great real estate path to extremely higher profitability and the cash flows are extremely strong and the stock is extremely cheap we told our cliepnts this mornig to buy any weakness. >> last week saying the brands are the where the strength is tapestries and khors and ralph lauren which do you prefer. >> sure, i think we're seeing strength in retail especially apparel. urban which reports tonight, and american eagle which reports next week. >> urban has had a monster run just looking at the chart. what are you expecting tonight >> tonight i expect strong sales and very strong earnings what helped tjx's numbers was very improved market downs on year on year i think you'll see the same trend here

the fashions on urban brands are just better year on year >> what does it say just about the consumer itself? we spent a long time talking about the death of the mall. it seems like whether you're in the mall or out of the mall you're doing pretty well right now. and amazon doesn't seem to be eating anybody else's lunch so to speak >> we've been on this program many times this year pleading for investors to buy retail. i think it's pretty simple the consumer is the strongest its been since 1999. companyerize getting their act together with real estate, and they're catching up on amazon fulfillment. their real estate has come down and their inventories are controlled combined with a strong consumer. what do you get? high higher earnings, higher stock price. >> do you think it's going to pea stable when the consumer continues to weaken? >> however, we don't see any signs of a consumer slowing

right now so we think the consumer can sustain strength over the next couple of years. >> you're nodding. do you agree >> i do. i think we have a healthy level of inflation >> those comps have been looking good, guys thank you. all right, we are just -- actually, just moments ago deputy u.s. attorney robert khuzami just entered the courthouse where michael cohen is expected to plead guilty to several charges. we're expecting that right around 4:00 p.m. eastern we're going to keep monitoring this, of course, and we'll bring you the latest details a we get them 15 minutes here before the closing bell i have the exact levels for you. s&p 28.787 we're just off of those record levels but still got 15 minutes. dow's up 66.

>> shares of toll brothers, by the way, are up sharply today after reported earnings. go over the numbers, and also the overall impact it's having on housing beyond just that paicarto rtul sckthat's next.

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shares of toll brothers up sharply today, this on the heel of its earnings. diana joins us now she's got more on the report itself and the overall sense of things i guess in the housing industry >> toll beat expectations and raised full year revenue guidance to the highest in the history of the company with a median price of about $850,000 the median price of all newly built homes is closer to $300,000 the ceo doug yearly said the company was not seeing affordability issues thathe rest of the market and buyers are still adding the same amount of premiums and options while international buyers have been pulling back thanks to the stronger dollar. toll executives said they have not seen any big change in interest but he said it is one of the

company's stronger markets now strength in toll's numbers is not really indicative of the rest of the market again, they are a high end builder. the vast majority of the market is struggling with low supply, inflated price and weakening affordability. >> what do you think >> okay, thank you, diana. >> just got word from our cash in, he says $2 billion to sell on the close that's actually a big sell order. so maybe while we're seeing some of the air come out tof the dow here, it was up about ten minutes or so. s&p is still on that high. russell up 1%. up next we'll take you to the nasdaq for a look at today's biggest movers on the session. and then later we will get earnings results from urban outfitters this has been a monster stock,

up 150% over the last year we'll bring you the results as soon as they're out. by the way, speaking of retail targets is going to report earnings tomorrow before the bell be sure to tune in to squawk box. we'll be right back. yze and tak? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online.

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the nasdaq is on pace to close higher for its fourth straight day let's get up to cnbc's bertha coombs with a look at the movers >> the movers today pretty much in the small cap and midcaps that's where we have record highs that are going right along with the s&p 500 the nasdaq is within 1% of its record high from last month. among the big new highs today irobot on the back of really strong earnings there. folks love that roomba also retailers today seeing some all-time highs not sure why we're seeing some dow industrials there as the moment along the laggards some other consumer staples seem to be selling off just a bit among the losers in the nasdaq

100. apple is just off that fresh all-time high, still well above a trillion dollar valuation. it's kind of a little dipping here going into the close. netflix is actually in bear territory, but when you take a look at that stock, it is still up up about 75% and take a look how its done since the bottom as we look at the record bull market this week sara, back to you. >> yeah, little bit of a comeback for netflix >> just a little not bad. >> well, yes it's true. facebook is also up today. up next we're coming right back we're going to give you the closing count down >> you can still have it there's more time in the show. after the bell, how would you like to make 100 trades for free what jp morgan is doing to make that a reality and what it means for the induryst coming up on "the closing bell. we're back after a quick break you always pay your insurance on time.

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your kids love swimming in their pool. you like them. if you forget your trunks, they'll loan you some. they have a section in their stock portfolio just for pool stuff. everyone likes them. you like them. but you'd like them better if you made more money than they do. don't get mad at your well-liked neighbors. get e*trade. welcome back to "the closing bell" as we count you down to the end of the session a couple of minutes from now, a day in which the s&p did hit an all-time high but has backed away from that right now a couple of highlights at least to take a look at because they have been suffering recently but up today bertha coombs mentioning it

earlier, and it is showing some of that momentum so many investors had become accustomed to for so long and tesla which we've spent a lot of time talking about over these last couple of weeks it is up 4% there sharply on gaenz there this on news morgan stanley had suspended coverage of the stock they have yet to be officially hired, but they have worked for the company in the past, stanley as well as goldman sachs if it's there you'd think they'd like to take advantage of it >> i want to kmentd hecomment hr not closing at the new high. most traders use closing high as the one that matters not intraday and the reason they don't is we

don't have intraday records going back very far. i do want to point out market on close closing pretty strong about $2 billion and also i think it's towing headlines that could have a bit of an influence on bringing us a bit lower on the day >> all right, of course ringing the closing bell here at the big board. at the nasdaq the bank of princeton. second hour of "the closing bell" starts now and welcome to "the closing bell." i'm sara eisen here for kelly evans. first let's take a look how we are finishing up the day on wall street it was a bullish day it was a day in which the s&p 500 did reach a record high, did not manage to close, though, at a record level 2,862 not going to cut it.

still managing to close higher. and it was the nasdaq that saw a comeback today up 0.5% and you did see broad-based strength, though in the overall market consumer discretionary and retail led the charge higher retail and staples all seen on the defensive, tend to go up when the yields are down coming up richard weighs in. and also president trump's former attorney michael cohen is expected to officially enter a plea deal at a court proceeding this hour. we'll bring you the latest as soon as we get it on that front. first, let's talk about this market joining us ismike santoli, kerry and mike

top of the dow was intel and merck trailed. discovery was the leader in s&p 500 but coty, the beauty company along with consumer staples lagged on the day. mike, finally a record high since the first time jisince january. it's been notable. >> i would say the markets have sort of declined a lot of these opportunities to pull back harder you had this turkey stuff, it told traders the 2,800 level was pretty comfortable at the moment i don't think it's unusual to have the market be a bit bashful and back off a bit because momentum has not been strong it's been really kind of grinding its way toward the highs. also up more than 6% since the end of june. it's only eight weeks. that's a pretty good move no matter where you are relative to

high >> just when you get worried about a place like turkey you have an unexpected melt up what does it say about a lack of any real headlines or macro economic drives are resistant with new highs >> it also appears investors are very confident that consumer spending and the strength we're seeing on the consumer side of business is going to continue. if we look at just the last week or so between tjx, khols, toll brothers, costco, we can go through the list of names that have been struggling in the sense that consumers have not been spending as much. even though some of othese haf have seen the customers come in, and the market is finally embracing them and this is not a part of the market that was strong in the first half we've had a broader market as earnings have been strong across the board in many sectors. and i think that is encouraging

and points to at least a continued, i'd say, belief that earnings can grow over the next couple of quarters >> mark, what do you chalk these record levels up to? >> well, i think a couple of things one, i think the market really was being suffocated by concerns about the big geopolitical risk, one of course is trade, american relations, the of course is iran and the repositioning of sanctions and what that could do to potentially spike oil prices and turkey fluid, and the risk of contagion to other financial institutions or emerging market countries. and since at the moment that's receded from the headlines as a concern it's allowed the fundamentals to breathe, and the fundamentals had been very strong so together it says to me that the market of course in the absence of those headlines as a path of least resistance, an upward bias. >> yeah, speaking of risk

there's never a lack of concern the bull market could be near the end of its record run. dom chu is back to lay out the highs. >> those put the worries of potential down sides on the front burner we spoke to david rosenberg. he's got five big reasons why he's saying the bull market might be ending some time soon first he's look at the job markets. it's stalled out there aren't enough skilled workers. you've got a tighter market which does mean higher wages, it kind of gets in the inflation story. if you couple that with tariffs, higher prices you get the addition of tighter monetary policy from the fed, so that's a big deal third you've got a slowing of money supply, checking, cash, savings, those rates consistent

with an economy down shifting to perhaps a lower growth level fourth, what looks like a peak in the housing market, and wave seen that play out in the homebuilder stock, and then fifth a peak in the credit cycling with some kind of cracks evolving in the investment grade bond universe. i want to hone back on that home building thing again today that stock on pace for its best day since november of 2009 it's also pulling up as you can see here a lot of the other homebuilder stocks along with it let's end here with a u.s. home construction etf, that ticker itb, up nearly 4% on pace for its best day since nearly april. but important to look at the three-year chart you can see here a nice peak about a year ago and it's kind of been down trend [stalling out. so something to watch as we talk about that home building and real estate story in the broader market back over to you >> dom, thank you.

speaking of risk factors another thing that can worry about investors is the plea deal just reached by president trump's former lawyer, michael cohen >> reporter: that's right. and just within the past couple of seconds we're getting some new news off capitol hill. this news is the senate intelligence committee has advised chairman burr and vice-chairman warner will make a rare joint statement on camera shortly. so we're expecting a joint statement from the two senators that have been leading that senate intelligence committee investigation into russian interference in the 2016 election unclear what if anything those two senators should have to say. but we should learn what it is very shortly at this hour we are now monitoring the federal courthouse in new york where we expect to see michael cohen who has surrendered to the fbi, the president's former lawyer, now accepting a plea deal of some kind we'll get some details, beginning at 4:00 p.m. eastern where it was scheduled to begin

where we believe michael cohen will appear momentarily. what we think is going to happen he here is michael cohen will be read the charges against him, make sure he's aware of the allegations against him, aware of the situation he finds himself in and is doing this of his own free will, and then we may get a guilty plea directly from michael cohen today it's possible of course they'll push this off. the southern district of new york is well-known for making the defendants here plead guilty to maximum sentence. and if there's cooperation on top of that, they could work off the cooperation and get that sentence worked off over time. we'll watch if there's a specific cooperation agreement from michael cohen and federal law enforcement and any information he might have about then candidate donald trump. and then at the same time in virginia we're also monitoring

the jury in the manafort case which has been deliberating since thursday on 18 counts. the jury sent a note to the judge earlier today in virginia asking what would happen if they couldn't find consensus on one of the counts. the judge told them to simply go back to the deliberation room and keep deliberating. really at any moment we could get a decision from the jury there or that could stretch on for days at this point so three new stories happening simal ta simultaneously here, sara. the senate committee making some sort of statement, the michael cohen court appearance scheduled to happen at this hour and the manafort jury is out, and we don't know exactly when that will come in, but news pending there as well, sara. >> wow, it's head spinning eamon, thank you for keeping track of it all. kerry firestone how as an investor do you process this information, and when does it become relevant for trading?

>> you know, that's a good question, but if we look over the last year and a half what we've seen are various geopolitical factors, whether it's tweets that are, oh, you know, insightful and controversial or all types of intrigue going on around the white house and the people within the white house and none of it hazmatered to the market so what hazmaters mattered to it is earnings growth i would say on one level yes this is concerning and people are focused on it. on the other hand, the vestors do not seem to be paying attention to it, and it's almost back run noise to the market these days >> but what the market might care about is the president, and the market likes this

president's policies >> there's no doubt about that the market has liked policies that have had bearing in terms of corporate earnings, in terms of the economy in general. what exactly are we trying to discount in terms of a potential range of outcomes? about a year ago whenever you would get these headlines that seemed to suggest the president was in one way or another in jeopardy, why, we didn't have another tax law pass yet, deregulation wasn't pushed through. right now the economic agenda of the administration, if it's going to be a hard line on trade, isn't necessarily embraced by wall street. so what are we losing if in fact that gets sort of defanged a little bit i think that's where the market comes down it's too hard to even know what the implications would be. >> i guess the market does inject some level of uncertainty, which matters even though we do have some economic of agenda passed, the

tax cuts, which mike said has helped fuel this market. how do you read it >> the market dislikes that as most, we know that for sure. particularly when we're closing in on the mid-term elections and right now the markets seems to perhaps be aware maybe even discounted the prospects of losing the house to the democratic party what the market isn't i think discounting at this juncture is complete sweep of congress and to extent these things are closing around the president relative to things that could affect his ability to govern and what that might mean in terms of unraveling some of othose pro-market policies in terms of tax cuts or deregulation in the subsequent two years of his presidential term or if he's in office would be problematic for the market. that's important in what materials come out of the resolution of these two or three items that are looming out

there. >> mike, as far as any other uncertainties, dom referenced howing, i guess it all comes back in some ways to how strong the u.s. economy is and how long it remains that strong and when you have uncertainty, that could make an impact. >> it doesn't help because the confidence piece has been one thing we rely upon to say maybe the good times can feed on themselves a little bit. obviously a bit of a question mark there how that continues on from here. i do think the market has lost the leadership of some of these areas you would have loved to have seen lead for a long time the housing market has not really been kind of a bellwether area to say this is how the market has been behaving i think you've been able to absorb a lot of these things that were really driving the bull market for a long stretches of time. >> today there was a come back >> today was a bounce in semi. that's what i'm saying the money stays in the market

and things are good enough at this point when unfloimt gets employment g, things can stay lofty for a while but usually it means you're closer to a peak than a trough it doesn't mean you're closer necessarily, doesn't mean the market is fully priced into the good news. >> gets to the debate of where we are in the cycle. are we in late cycle as we've heard a lot and maybe that's the reason behind some of this rotation in the market if so, what does that even mean as far as how much is left >> well, we're certainly not early cycle. people have suggested you should really use 2016 as a starting point because it took so many years for people to recover from the trauma of 2008 but that have gone been said, what we're seeing of course is this acceleration of earnings up 26% for the ninety-second quarter, revenues up 27% those are just really big

numbers. to me the biggest risk about this wall of worry and issues for the market is that valuation starts to get expensive. and we saw that in january when we were looking at the market trading at 18 times earnings but of course the tax cut and strengthen economy has resulted in those expected earnings being low. and so we've raised earnings and now the market sells for 16 times earnings if we put a multiple on that maybe we have got a 6% to 8% growth just to get back to where the market was trading in january. that's a fact we worry about interest rates have stayed low interest rates have not moved higher that's part of why toll brothers had such a good quarter. and as long as we have interest rates low and earnings growth continuing to move higher i just think that's fairly safe for this market here >> yeah, i mean to the point of earnings growth being strong, it is going to be increasingly

going to be about 2019 and whether estimates can hold up for 2019 i would push back a little bit on the idea while earnings are growing at 25%, they're not going to slow all the way down towards zero guess what, when the base is higher because you've grown at 25%, it becomes harder to grow at 25% not year, not easier because the market has been so strong so there are two ways to look at that >> is that the large number? >> it's not. it's called the base effect. thank you for provoking one of my pet peeves. >> it's the base effect, sara. don't forget that. >> we've got some news to share on the manafort trial, former trump campaign chairman. >> i do indeed, david. thank you very much. the jury has just submitted another question to the judge. we don't know yet what that question is, but the backdrop for this, of course, is that mr.

manafort basically is charged with 18 different counts the jury has been working through those. the most recent note asked the judge what to do if they could not reach consensus on one count. the judge instructed them to continue deliberating. and if they could not reach consensus on that one count, that he would consider a partial verdict on the other 17 counts so we don't know what this question is. it's coming late in the day. they've now deliberated for five hours since they submitted that particular question, that earlier question to the judge. so we will see we're watching this very closely, but once again the jury has been deliberating for some time now they've just handed another question to the judge. we'll see whether he takes a recess the last question, basically he's called a five minute recess just to explain to the jurors. so far he's not done that, but we are going to be watching it

and see what the judge has to say. guys, back to you. >> to remind of course, we're talking 18 counts in total for manafort >> and a lot of evidence to work out. >> five counts on income tax returns, foreign bank accounts, failing to file them, bank fraud. i've been in the jury room and all it takes is one person and you're going to be in there a long time conceivably. and certainly with the case of this complexity one would expect that's not uncommon. >> and so hard to infer from the questions about that one count >> we'll share any news as we get it sue herrera, thank you very much getting back to this market conversation as we await some of the news on cohen, potentially on manafort, a lot of rotations happening. that's what everyone's talking

about, value instead of growth, apple as a value stock right now. what does that tell us about the staying power of that kind of rotation because we've had so many fake outs before and where the conditions are now that would suggest a clue. >> it's interesting. it hasn't purely been from growth and expensive stocks into cheap value stocks but it has been more towards defensive stocks not today but in recent weeks. one, when the cyclical stocks and the technology bellwethers need to cool off a little bit, then bond yields need to come down and it makes sense for the defense to take up the slack and it's kind of breathing in a certain way and has not got all its eggs in one market the market has proven that's not really the case. so that's a net positive on the other hand, if this defensive rotation happens in a really prolonged way it may be saying the market is telling you

something about those longer term growth expectations but i don't think we're there yet to kind of make that call. >> in a way you couldn't have drawn up perhaps a healthier scenario coming into the year of s&p 7% but multiples declining ru as a result of earnings being so strong >> no doubt about it it's almost unprecedented to be this into an up trend and have a huge expansion of earnings growth >> how much of that is function simply of a stronger economy or how much is truly just tax rates coming down? because they will get anniversary i don't know what it's going to be, second quarter next year or when we'll see some of that bounce >> but between tax cuts, between oil -- remember where oil was a year ago you rallied a lot and the dollar

having been down the first half of this year all that stuff worked together to essentially give an extra little turn. >> but there is a lot of strength in the economy. you see that in the comps in retail and discretion out-performance. up next we're going to discuss how much of an impact jp morgan story, how much of the upcoming mobile app offering free trading to some investors will have the on the online brokerage industry big story of the day with all those stocks ahead we're continuing to monitor two important situations as michael cohen appears in court to plead guilty, and we're watching any developments in the trial of former trump campaign chairman paul manafort see that's funny, i thought you traded options. i'm not really a wall street guy.

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a new app called invest. he joins us to talk about what that means for the future of retail trading do you think it was an overreaction to brokerage stocks today or do they have something really to worry about here >> no, i think there's something to worry about i've always been a strong advocate giving your customers a better deal. jp morgan does not have a large full-service brokerage let alone great contact with lower income investors. so i think this is a direct attack on the online brokers >> is jp morgan a leader here or a follower bank of america has been offering this kind of service since back in 2006 >> exactly, and there's a lot

of, you know, fleas out there. but i think this is jp morgan tries to catch up a bit on their brokerage business they don't have a large full-service brokerage either >> so does it put price measure on the others to follow, whether it is those who have it as a central part of their business model or a wells fargo, for example, as well where certainly managing money and having a brokerage firm is also important though not necessarily central to everything they do? >> i think it's at the low end i think the robo advisers that have been started by wells and bank of america it certainly will push pressure on the price of that. i don't think it's going to change the fundamental pricing of full-service brokers because they had competition from just charles schwabs and etrade for a long time. but they who have low costs for trade may have to lower it more if this takes off.

>> the key to this has been the ability for people to access this through an app on their phone, something ten years ago or even five years ago really was not pervasive as it is today. i expect we'll continue to see these kind of offerings as technology advances. >> in all products, for sure >> and part of the take is jp morgan views it as a total customer relationship kind of thing. if you download this app, should that person expect to get a whole new batch of credit card solicitations, are they just going to be thrown into the new leads file for jp morgan across the board? and i guess part of that, too, is jp morgan could have all that data that comes with all the activity on this app >> i think there's truth to that, but my guess is they're probably to get their existing customers to do more brokerage

with them as opposed to attract new customers. so they already have a lot of this information my guess is what they will focus on is trying to get business that is now going to other companies, bring that business to jp morgan, that they'll already be their bank in terms of checking accounts and so. >> are we going to be paying fees at all in the next few years where all of this is going for making trades? >> well, i guess the question is it'd be minor fees, and it could be zero. as you know the etfs are going to zero fees now there's other ways you make money than just that particular fee, but fees are going to go lower, prices are going to go lower in practically every industry because of technology

and the use of technology to reduce cost. >> good to get your take on this one. thank you for joining us corporate ceo of wells fargo we've got inbreaking news on the trail of former trump campaign manafort manafort right now. >> the jury has apparently reached a verdict in eight out of 18 counts against paul manafort that leaves ten counts they have not reached a verdict on just a reminder mr. manafort faces 18 counts. he has pleaded not guilty to each one of those. it was a 12-day trial and basically jurors began deliberating on thursday, august 16th apparently they have reached a verdict on 8 out of 18 counts. you will recall just a few moments ago i told you that the jury submitted a question to the judge or a statement to the judge. we don't know whether it was a question or them telling the judge that they had reached a

verdict on a number of charges basically we've been showing you what mr. manafort is accused of. once again he's pleeaded not guilty to lall of those counts. will he take it as a partial verdict, will he tell them to go back on those ten counts and come to consensus? they have come to a verdict on 8 out of 18 counts, the maximum sentence mr. manafort forced on all 18 counts was 305 years. we'll keep you posted. this is a still developing breaking news story. i'll turn it back to you guys. >> okay, smuue a strange coupling of these two stories, eamon >> it's certainly a fascinating moment so let's refresh exactly what we know about the charges mr.

fanfort was facing it came basically in three different buck mchts the firets. the first one was on subscribing to bad tax returns, tax returns that were not accurate because of his hiding income and the second was failing to file for foreign bank accounts and the third count here bank fraud that manafort was along with rick gates, his number two, they were doctoring documents in essence in order to convince banks to lendmoney to paul manafort the banks otherwise wouldn't have loaned so those are the three areas where he's facing charges here that the jury has come to some decision here on 8 of the 18 counts we don't know which of these three buckets it's in, but you

can suppose they had an easier time dealing with one of those issues and a harder time dealing with those other issues. he has another trial in washington in september of which he's going to face allegations of failing to file lobbying reports, foreign registration act reports and other documents that were required in terms of his lobbying business. so no matter what happens here paul manafort is not out of the legal woods. but it could be an encouraging sign for his defense that so far the jury seemed at least unable to come toon a agreement on ten of those counts, more than half of the counts paul manafort was facing ultimately it's going to be up to the judge, though so much speakulaticulation on tg here because he seemed to be tough on the prosecution when they were arguing this case. otherwise we could see the jury go back to their deliberations >> we'll see what the judge decides on that front.

stay right there if you would. we also want to bring robert vince into the conversation, former assistant u.s. attorney based on what we know so far, 8 of the 18 counts, eamon just broke down the categories. which ones had the most serious implications for president trump if at all? >> well, it's really hard to say at this point. i think the reality is that they all have implications because the prosecutors are going to try to get conditions here and then put pressure on manafort to try to gain his cooperation. so anything that gains leverage here will by useful for the prosecution. >> give us some insight if you can how a judge would respond to a jury coming back saying we found on 8 of 18 counts. i mean is it likely he's going to send them back to the jury room and say keep at it or accept where they stand right

now? >> it's a good question. i think that typically the judge would try to send them back and give them one more opportunity to try to reach a unanimous verdict as to all counts usually unless the jury says to the judge we are hopelessly deadlocked and we do not believe further deliberations will be at all fruitful, as long as they don't say that, he's likely to send them back for one more shot at least for a partial verdict >> does the fact they've come back for some clarifications tell you which way this may go >> it's very hard to read jurors questions. you never know if that's a question all jurors or asking or one hold out before looking for an answer before he or she joins the unanimity of the other jurors i would say they've reached a conviction on 8 of 18 counts that's more likely that's the

case rather than acquittal on those counts but we really don't know unless the judge decides the case's verdict at this time >> how important is this verdict overall for the mueller investigation overall, in terms of either adding to its momentum or perhaps taking away from it depending on what we find or what the jury finds? >> well, i think the stakes could not be any higher for mueller's team this is an absolutely critical win for them they have to have it because if they don't get a conviction here at least on some of these counts it will really question the viability of the mueller team going forward. there's been so much political headwind for them to deal with, and certainly people critical of mueller and what his team is doing will only be emboldened if they are not able to gain a conviction here. >> these charges, robert, seem very complicated for a jury. am i right about that? i mean how difficult do you

think these deliberations are when it comes to some of these specific charges, failing to file a foreign bank account. going through all of them, it feels like a tricky task >> it is and that's one of reasons why this is taking perhaps a little longer than people thought it would. but in my experience the complicated financial fraud case like this is not unusual for a jury to be out for four, five, six days before reaching a verdict. so this could either be a time where we get a verdict, the judge accepts the partial verdict or it could simply be another bump in the road and he sends them back and we wait for them to come back and work it out. >> worth noting here, of course, eamon, that we're also monitoring the outside of a courtroom here in lower manhattan federal court where michael cohen, the former personal attorney for president trump, has apparently agreed to -- well, not to plead guilty

to certain charges but eamon, at this point we don't have a lot of details yet. we're still waiting from a briefing from perhaps the u.s. deputy attorney. >> a lot of legal balls in the air here simull tataneously. these charges relate to issues that predate his involvement with the trump campaign. but we're getting a bit more information now from nbc reporters at the scene, at the courthouse there who say judge ellis is going to ask jurors individually if there can be more deliberation. we're going to see whether we get a partial verdict here from the jurors or whether they tell the judge that they feel they can deliberate further there's some wiggle room here for some of them to make up their minds and ultimately find some consensus on these other ten charges. but right now or information is

that the jury has made up its mind, has reached a verdict on eight of the charges but not on ten of the counts. so the jury here sort of a mixed bag in terms of what the prosecution wanted and potentially what the defense wanted meanwhile, you talk about the defense lawyer, former lawyer, michael cohen in new york, we'll see what he's pleading guilty to the white house is much more concerned about the michael cohen situation than they are about the manafort situation and the reason is -- >> eamon let's break in herean get to sue who's got some news on the verdict >> as we were telling you basically the jury came to a conclusion and reached a verdict on 8 out of the 18 counts. here's what we know, count 1 through 5, guilty. that is filing false taxes in a variety of years count 12, failing to register as a foreign bank and financial accounts

count 12, guilty count 25, bank fraud, guilty count 27, bank fraud, guilty they were unable to come to a consensus on ten counts, and the judge says that he may consider filing for a mistrial on that particular ten-count situation we're still trying to figure out exactly the total number of years under these counts that mr. manafort faces but once again count 1 through 5 guilty, count 25, guilty, count 27 guilty. i'll turn it back to you as we continue to monitor the situation coming out of the courtroom. guys, back to you. >> so that's a guilty on eight counts, mistrial on ten. >> eamon, your reaction. >> well, it's fascinating here because what you got, if i'm hearing sue correctly, you've got the jury finding manafort guilty enseveral of those three

buckets we were just discussing. remember there's the bucket involving tax fraud, failing to disclose foreign bank accounts, and then the buckets involving bank fraud there are several charges in each of those buckets. based on what sue just reported, it seems the jury has found him guilty on several charges in each of those buckets but not necessarily all of those charge in each of those buckets a fair split here by the jury fairly swer sueded by some of the evidence in some of those counts than other evidence on other counts by similar activities alleged by paul manafort we'll have to have some insight why the jury believes some of those charges in relate crimes but not others it looks like at least something from each of those three categories paul manafort has been found guilty of >> is robert mintz still on the

phone? give me your take here on what's going to happen on the ten counts, is the government going to come back, with they re-try it what's your insight here on what we now know what the jury has found guilty and not >> it's hard to say exactly what kind of exposure paul manafort is facing with the counts he's apparently been convicted of but my kwesz is there's going to be enough in those counts that prosecutor will likely not go back and re-try him on the counts in which the jury seems to been unable to reach a unanimous verdict. typically what happens in these cases the judge will look at the crimes, aggregate the financial loss, largely based on the amount of taxes the government has alleged paul manafort failed to declare and pay taxes on, the income he failed to declare taxes on so that's what's going to drive the setting.

my guess is it's going to tee substantial and enough for them to apply leverage they'll likely take these counts and move onto the next trial in the district of columbia that begins in september. >> i was asking you earlier what does it mean for mueller, so tell me now what does it mean for mueller? is it a win? >> oh, it's absolutely a win for mueller, yes i mean although they didn't get a conviction on every count, it's going to be enough that it's going to be expose paul manafort likely to a prison sentence somewhere in the neighborhood of eight to ten years, is my guess and that will be something that's going to apply substantial pressure to him. they'll take this, move on and they'll see what happens in the next trial in september. >> let's bring john harwood back into the conversation. do you see this as an credibility boost to mueller, his investigation and where will he take it next? >> well, i don't think robert mueller needed a credibility boost, but it does demonstrate

in combination with the michael cohen plea in new york that the ring of criminality surrounding president trump includes his campaign chair, his national security advisor, and his personal lawyer. and in all cases the -- their stories relate to president trump, his campaign. and this is a -- this is an indication of the fact that president trump is in very, very deep trouble with robert mueller, and the russia scandal is only going to intensify from here you've got an additional trial of manafort, you have as john mintz was saying, pressure now on both cohen and manafort to cooperate with special counsel mueller. michael flynn is already cooperating. now, we did learn that george

papadopoulos has not provided much of use to special counsel mueller. but the fact that the sentencing for flynn was postponed today is an indication that prosecutors may have some use, additional information or testimony that they want to procure from michael flynn. so i think the president's in big trouble. this is going to be a landmark day. these twin guilty pleas and convictions. and president trump, we'll wait to see his reaction, but it's not going to be good >> eamon, on that front, doia expect to hear anything from the white house? what has the white house said in both cases if anything >> i don't expect to hear anything from the white house. right now not commenting at all. the president is aboard air force one at the moment. he is on his way to rally in west virginia tonight. so we may hear from the president at that rally.

and of course they have excellent wifi onboard air force one. but the staff here at the whoit house not commenting but the president will be digesting all of this on air force one where he'll want to take it all in on cable news we can expect he's tuned into the coverage of this guilty plea situation and this guilty finding by the jury in virginia, digesting all of that on air force one as he wings his way to west virginia. and we'll see what he says to the crowd this evening >> guy, i think the chances of the president speaking about this tonight in west virginia are approximately 100% >> right and robert, he's said this before, it's a witch hunt, there's nothing that connects me to russia or collusion, there

was no collusion was there anything in this verdict that would dispute that? >> well, no, not really directly it certainly takes the wind out of the argument mueller is on a witch hunt because he's got a conviction here on some substantial charges. but none of these charges relates directly to the president or anything mr. manafort was alleged to have done in connection with the campaign so he's moving one step closer in this investigation, but he's certainly not at the point in which any of these charges relate directly to anything that the president was involved in directly >> sara, let's step back and think about these elements, first of all, paul manafort, the charges do relate to his work on behalf of a russia aligned oligarch in the campaign paul manafort of course was chairman of the campaign michael cohen during 2016 was trying to develop the trump

tower in moskow. the cohen plea, we believe but we don't have all the details does relate to payment of hush money in connection of potential affairs, but oats also the case that michael cohen has had connections with russian figures for a long time. so in addition to that michael flynn, the national security advisor, the felonies that he's pled guilty to involve conversations with russian diplomats about policy towards russia so there's a lot of nexus here between the cases that are ongoing and the president, and all of them have some intersection with russia or russia aligned interest. >> you know, one of things to look for here in this as we see michael cohen's guilty plea, we don't have the text yet. at least i don't have it in front of me in washington.

but at some point we will see whether or not the president is named in that guilty plea. because one of the pieces of that is campaign finance allegation, we are told. so will the president be named even if he's named as presidential candidate a, as they sometimes do in these documents, this might be information from the government in terms of what they know here. and it question is does the document reveal anything about the president's awareness of this alleged campaign violation. and that would take this right to the president himself in a way the manafort situation doesn't exactly do in terms of the allegations against him and the eight counts which he's now been found guilty of >> it looks like we have an after hours event reaction within the s&p i just want to pull up after hours trading market obviously closed plus a bit of steam into the close. here's the etf trading 0.3% hereafter hours. in case you're just joining us, michael cohen, the former

personal lawyer of president trump, his personal attorney surrendering to the fbi, and paul manafort we're learning is found guilty on eight counts stunning >> and you had a reversal during the day from an all-time high to below an all-time high, and you had the volatility index stay, and people were bracing for some of these headlines >> eamon, some new headlines i'd love to get your reaction to from a number of news organizations. cohen saying he violated campaign law at direction of candidate. cohen saying he violated campaign law at direction again of unnamed candidate so we know who that is but give me the significance. >> right,iodon i don't have the

headlines. >> yes they are other reputable -- >> so what that means is that the president is not named by name in the documents but it's indicated that michael cohen broke the law at the behest of broke the law at the behest of the presidential candidate, donald trump, that michael cohen was working for. so that played out in black and white. we'll have to get the exact wording from the document as to what exactly it's suggested that the president knew, but the language that you're reading to me suggested that the president was aware there that michael cohen was going to be breaking the law and directed him to do that that will be politically damaging to the president. it will be something that the white house will have to react to and as john just said, you can expect that the president will react to it tonight in that rally. the question is whether it's going to do anything to alter the political climate in washington and across the country, a climate in which his base has been extraordinarily

supportive of this president they believe in his mission and they believe what he's doing and they like the results they've seen so far in terms of tax cuts and deregulation and a numbero the social issues and those things and this may not move the needle for them. you'll see on the flip side opponents of the president will be encouraged that their suspicions may have been right all along by some of this language. >> what about congress >> they were in the opposing camp, anyway >> does it move the needle and you can help answer this for republicans in congress. >> it is difficult to know when in a circumstance like this the dam breaks or people have a reaction that's different from what they've done in the past. remember during the watergate scandal, republicans hung in -- and conservatives hung in with richard nixon very close to the end. now, eamon is correct. the president has held on to the overwhelming majority of his

base, but it's a smaller base than it used to be he is in a weakened condition and democrats are poised to make big gains in november. if you start adding additional evidence here, i think that is -- makes it a heavier burden for republicans to carry this fall and they are going to face the choice as the stuff hits the fan to either distance themselves or accept the consequences as we get to november a couple of points to make on the -- as eamon said, if, in fact those headlines that you are reading are accurate, then you have michael cohen admitting to a crime perpetrated as the direction of the president we already have heard the president's voice on tape discussing cash payments in connection with those payoffs. in the case of karen mcdougal. >> it's also true when we talk

about paul manafort, yes, his crime for not committing to the campaign and paul manafort was in the trump tower meeting when they were seeking dirt on hillary clinton from the russian government as advertised in the e-mail setting up the meeting. as i said, the nexus of criminality around president trump increases the political burden on him, the political damage and fallout that he's going to have. don't know when that damage becomes unsustainable. it's been sustainable for him so far, but you certainly rather have less than more if you're president trump and you can judge from his recent tweets and perhaps from what he says tonight how he's feeling as that pressure increases on him. >> more breaking news out of michael cohen's case specifically, sue herera with the details. sue. >> some of this is a repeat of what david gave you, but it bears repeating given the gravity of the situation basically, the judge is saying that mr. cohen is going to plead

guilty on count 7 which accuses mr. cohen of willfully of causing an unlawful corporate contribution according to the judge. count 8 accuses cohen of making an excessive campaign contribution mr. cohen's plea bargain includes possible prison sentences of up to five years and three months according to the judge and the big headline as you guys have been talking about, mr. cohen says at the direction of, quote, candidate for federal office, end quote, he arranged to make payments, quote, for principal purpose of influencing the election that is the bombshell headline michael cohen making this plea deal this afternoon in federal court. the interesting thing is going to be whether or not he continues to cooperate with authorities. there have been conflicting reports from major news organizations as to whether or not this plea deal requires him to continue to cooperate with prosecutors. that remains to be clarified nbc news has not confirmed that,

but once again, that bombshell headline is that mr. cohen says that at the direction of the candidate for federal office, that would be now president and he arranged to make payment for the principal purpose of influencing the election >> more news is coming out of this hearing it's not over yet. we'll bring it back to you. >> do we have robert mince i know i've asked that a couple of times former assistant u.s. attorney i know we brought you on originally to give us insight into the manafort verdict, but as a former assistant u.s. attorney, i'm sure you have some perspective here to offer in terms of what this means yet again. this is, by the way, of course, we should say the southern district of -- ever new york not related to the mueller probe or not the mueller investigation itself, but does this give them something to work with sure

this could be more consequential of the manafort conviction because if the references in the charges here are referring to the president that they would seem to be at the step of the white house and is something that is going to be -- the president's lawyers will have to deal with immediately. it absolutely causes a graver throat this president than the manafort convictions and it's really now the big unanswered question of whether or not michael cohen had agreed to cooperate with prosecutors presumably, if that were the case, prosecutors would not agree to that type of deal unless they had already convinced themselves that they had useful information, information that he has not already made public and that would be something that would give the president's lawyers even more concern. >> let's bring another expert

into the conversation. john carl in joins us. former assistant attorney general for the national security division. john, given what we've learned over the last hour or so, michael cohen, the former lawyer pleading guilty to eight criminal counts. manafort is found guilty by a jury of eight counts which is the potential bigger deal for the president >> you have to look at them together, i think. this is -- we have the president's personal lawyer pleading guilty to a campaign finance violation that he said was done at the direction of the then candidate and at the same time you have the former campaign manager being convicted of multiple felony offenses or lying about money that we know was received from foreign interests. including at the time that he was running the campaign

it's extraordinarily serious and something, i think that's serious for the american people to take account of and make sure that we have visibility and hold to account those officials that are entrusted, ultimately with our security >> so what if you're mueller, do you do then with this plea agreement that has just been reached between mr. cohen and the u.s. attorney in new york? >> do we know yet whether it has the cooperation clause we don't >> no, we don't. >> it's either not been shared or it's not been reported. >> i can walk through potential alternative. one is that under seal there is some type of agreement to cooperate. another would be that after

pleading guilty in order to obtain a favorable sentence that you agree to cooperate and if you're the mueller team of investigators, there are a series of questions that you'd be interested in asking mr. cohen about whether or not he's waving other activities including potential meetings with operatives on behalf of russian interests or other meetings that might indicate russian efforts to meddle in the campaign if he's willing to answer those question, you ask those question, but again, that was the case for people, remember, that was referred out of the mueller investigation, because it wasn't directly linked to russian meddling and has been handled as someone has pled guilty to a different type of interference with the election >>. >> john carl in, thank you very much for shedding light

two live shots and the cohen hearing and the manafort trial as we learn this hour that president trump's former campaign manager and his former lawyer both found guilty michael cohen pleading guilty to eight criminal counts including violating finance law and manafort found guilty on eight counts of fraud. just an unbelievable hour of news coverage. all sorts of implications and the potential market reaction. we will hand it over to our colleague michelle caruso-cabrera on "fast money" to pick up our coverage. >> hi there, sue excuse me, hi there sara, hi there, david >> we saw a sell-off toward the close here, don't you think? that's part of what was happening today? there was uncertainty about what was going to happen with both of these situations and why would you go long into them? >> the headlines in the earlier afternoon didn't seem to shake the market you are right into the close art cashen came by as he always does in the set, $2 billion to sell was a heavy amount and he did cite