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tv   Fast Money Halftime Report  CNBC  November 13, 2019 12:00pm-1:00pm EST

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>> the next one comes oevery quarter. it's a combination of two exist data sets. there are a lot of different ways to look at what's happening in the economy and that's an important one. >> thank you >> representative butler >> thank you so, i apologize if i have already, if some of those ground has been covered, but it's a pleasure to be here and to have you. i would say the growth in the forecast of our economy is probably the number one thing that affects the people i serve in southwest washington so it's helpful to hear from your per specktive specifically, in rural communities where unemployment is higher than the national average, most of my areas are rural although we're bumping up everywhere i wanted to hear some of your
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biggest take aways and i've gone through some of your testimony again, apologize if you're repeat, but in terms of outlook and some of the things that we've done in the recent years with regard to the tax cut and jobs act, different regulatory changes, to either maintain the growth we've seen or expand it, what recommendations would you give >> well, first, i think the outlook is still a positive one. no reason this expansion can't continue and a lot of value in continuing it. and we're trying to use our t l tools to accomplish that we're seeing this, in this the 11th year of an expansion, now the longest in u.s. recorded history. what we're seeing is that income gains are being, are the highest at the lower end of the wage schedule scale. and so it's very positive. we're also seeing people being
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pull ed back into the labor market there's a lot to like this rare place of the 11th year of an expansion and i think we're certain sli committed to doing what we can to extend it >> in that vein, i know your testimony touched on concerns with regard to the national debt could you elaborate on that, expanding and not contract iing the economy? >> it's a longer term issue that i imagine we all realize will have to be addressed oaf ti eede it's just the case this now the debt is growing faster than the economy. than the nominal gdp and ultimately in the long run, that's not a sustain bable place to be. now how to fix that, it's easy to say that and you know, how you do that and when is an issue that is up to you and not to us but i would be remiss in not
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pointing out the consequences of not addressing it are just that we'll be spending r more and more, our kids really and grand kids, they'll be spending their tax dollars service iing debt rather than things they really need like education, health care, security, all the things we need that they'll need, they'll be spending more and more of their money on tax but you don't need to balance the budget or pay down the debt or anything like that. you just need to get the economy growing growing faster than the debt by the way, successful programs for countries to get back on a sustainable path tend to take place over a long period of time and be relatively gradual. i would be looking at something that would work over time, but really would not be giving you a lot o advice on how to do it >> with my final 30 second, do you anticipate maintaining the current fed rate through the next year? >> i wouldn't say that at all.
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what i've said here, i'll go to the actual language, is that we see the current stance of upon mo monetary policy as likely to are remain appropriate as long as information about the economy remains prodly consistent with our outlook. moderate growth, strong labor market and inflation of 2% objective. that's a very data dependent statement. we think monetary policy is in a good place but we're going to be watching carefully incoming data and if developments emerge that cause the material reassessment, we'll act appropriate ly >> context, context, context i yield back >> mr. chairman, thank you very much for your eck wii anymorety, your strong and stable leadership and for providing about the most straightforward answers of anybody we talk to. yesterday at the economic club in new york, the president continued his criticism of the
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fed saying it had put the u.s. at a cometive disadvantage you take comments from public officials into account when implementing monetary policy and is there any president in u.s. history with this kind of criticism or praise from an american president sf sfwl we look at the data at the research and at the performance of the u.s. economy those are the things, we have a very careful thoughtful process that's been developed over decades, over a century really and that's how we try to sit interest rates we don't consider political factors and things like that in what we do >> thank you i have a friend in switzerland who went to borrow $10 million and got a negative interest rate they're paying him 30,000 a year to borrow $10 million. you see any prospect for negative interest rates in the u.s. economy. >> negative interest rates would slicertainly not be appropriate the current environment. we have growth, we have a strong
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consumer sector, we have inflation that's a bit below target so the very, very low and even negative rates that we see around the world would not be appropriate for our economy. those you tend to see negative rates in the larger economies. at times when growth is quite low. and inflation is quite low just not the case here it's different for some of the smaller european countries it's about keeping their currency from appreciation >> from december 15th through 18, there's slow consistent increases in rates we've turned that around with recent cuts this yoear. is there enough room to cover rates further if we get another slowdown or recession? have we given up monetary policy at the moment as tool for dealing with that? >> typical post world war ii recession has included rate cuts of close to 5% the current rate is in the mid
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150s so we're well short of that. 1.5% it's a fact not just in the united states, but around the world, that central banks are going to have less room to cut in this new normal of lower rates and low inflation that's why we are conducting this external review of monetary policy at the fed. we're looking for ways to make sure we have the tools to do what we're assigned to do by you, which is achieve maximum employment and stable prices even in downturns and that's what we're going to be doing i'll say also though that fiscal policy is often part of the answer, often a big part when there's a severe downturn and we would certainly look >> thank you again by bringing up the challenge that the public debt faces all of us here you know i was raise d to beliee that money supply and growth were causedly related that if our money supply grew more quickly, inflation was the
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inevitable result. you have muted expectations. is there no longer a connection between money supply growth and inflati inflation? should i pay any attention to modern monetary theorys? >> the connection between monetary aggregates x that's something we all learned in econ 101. i did. it was important em pe impeerically, the it was a good relationship a about 40 years as the financial system developed all kinds of alternative forms of money, just gone away. and so we don't, we look at those, but they no longer are a driving part of the theory it's really the price of money as opposed to the quantity that we look at, which is interest rates. i'm out of time, but thank you very much. mr. chairman, i yield back >> smart cotton. >> thank you, mr. chairman chairman powell. welcome back i want to start off by talking about china's economic growth. china's economic growth.
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in quotes. they've reported most recently 6.5% growth. that's down from most of the last 30 years, but still probably somewhat inflated in fact michael pettis at the carnegie endowment for international peace says chinese industrialists find it hard to find any economic sector in china enjoying any economic growth he had a few findings i found to be quite interesting first, gdp is not a particularly useful measure for determining chinese because they have some massivemen massivements second, that china likely distorts its gdp in a wii that's systemically pushing it higher then third, it's not so much a measure of economic output, but a measure of political intent given the benchmarks that china imposes on local governments as well as many state owned int
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enterpris enterprises. they could essentially achieve any growth target they wanted. what are your thoughts about this general question of chinese growth and the specific points that mr. pett pettis' research had found >> i think it's very hard. i certainly feel that it's very hard to understand china you know, you could read all you want visit it all the time, but it's still very hard i think for me any way to really feel like you understand the way economy works, the way is society works. so i think there's, i think you have to, as a general matter, just accept it's really hard to know i think on economic data in particular, you know, we don't and i'm familiar with michael pettis and his research and all
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that, but we haven't taken a view as an institution about that i think a couple of things are worth noting one is that you know, it may be that there's more information and change than there is in the level if you know what i mean. another is that we've noticed here in the last few years the volatility of their economic report has declined substantially, which suggests more management. none the less, we don't really know the truth is, we don't know. we have to take the data and we take it with a bit of grain of salt >> you spend at the federal reserve, a lot of time looking at a lot of underlying indicators and statistics, try to assess the direction of our economy. when you look at not just how the chinese low pressure in the communist party behave, but when you look at some of those indicators, how their people are behaving and things like energy inputs and ship, to you see a country behaving as if they have almost 7% growth now
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>> it's hard to say. i would say that one thing that is notable is that they have not responded with massive stimulus at this, to this current situation. they've had obviously over a longer period of time, growth has been slowing from you know, three decades of 10% as an economy matures and i think they're trying to manage that decline. they did put a lot of stimulus to work after the financial cris crisis and that supported their growth they have been more cautious and careful. they have a deleveraging campaign that's been doing on for one or two yoears they haven't really backed away from that. i think it's part of the global slowdown is trying to, trying to at least stop debt from growing inside china where they have usually high debt for a society. so i would say they're behaving relatively thoughtfully and responsibly in response, they appear to be, to this current slowdown
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>> all right thank you. my tyke has expired. >> senator has lamb. >> thank you very much, mr. chair and i appreciate your and the vice chair's convening of this meeting and to chair powell, thank you for being here and for your work. mr. powell, as you know, it is critical to the long-term safety and stability of the u.s. economy that the federal reserves makes data driven decision and remaining independent from political influence. unfortunately, recent political pressure on the fed is having real world economic consequences a recent study found that markets react each time you are publicly pressured to intervene in the economy with a quantity fibl change in expectations that the fed's interest rate targets will drop. chair powell, can you tell the committee what actions you are take iing at the federal reservt not only insulate against political ip flunfluence, but at signal to investors that the fed
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makes independent decisions based on sound economic analysis >> thank you soe best analysis welk can muster. we're human. we won't make mistake s of character or integrity i am familiar with that resernl. it's r very hard to look at our incredibly complicateded financial markets and economy are many, many things are driving results and pull out one or two tiny effects. there's other research, but it's absolutely essential that everyone understands that we are doing our jobs as we always have without regard to politics we serve all americans we do the best we can based on our analysis we try to be as transparent as we can we explain ourselves people put their dissent on the report and that's as it should be >> i think important understanding that research is complicated that we don't
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complicate it further. with political actors putting pressure on fed the fed and that's been the norm and tradition and it's one that i hope we can return to. i wanted to follow up on something senator lee talked to you because as a member of the finance committee which has jurisdiction over trade, i'm pushing for small businesses i've heard from businesses across my state that have been targeted by china's unfair trade practices, including the theft of intellectual property and forced tran fehr of proprietary technology on top of these economic harms, the administration has manufactured endless trade uncertainty and heaped tear i have tariffs on new hampshire's business i know you said this has created risks for the u.s. and global economies. can you expand on how trade uncertain tip has impacted the
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economic outwelcolook and what e use d? >> we hear from businesses and have been hearing for a year and a half that they're you know, that this is a big issue for them and that it's holding them back from making decisions in the first instance, businesses were looking at ways to rearrange their supply change almost all manufacturing businesses these days have supply changes that go so i think it's been a real distraction for management and it's weighed on business' wills iningness and ability to invest and keep growing and that kind of thing in terms of the appropriate response, you know, our response is not to give advice on trade policy, but it is to react to whatever it is that's helping our hurting our able ility to achieve our mandated goals this is one of those things. we call it out as something we're aware of and as something that's weighing on business sentiment and ultimately on the economy. >> well thank you for that and
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i'll just note we may submit to the record that i share representative frankel's interest and concern about the inflation gap. it's not just a wage gap but the impact of inflation at particularly in working middle class families and i hope that's something we can learn more about from the fed thank you, mr. chair >> senator henry >> welcome, chairman and thank you for coming to testify today. i had a chance recently to meet with a number of european central bankers and they really outlined for a group of us the steps that they're taking to understand and quantify and mitigate the risks that climate change is posing to the financial markets. i wanted to ask you what the fed is doing to understand those risks and to look at their role in the economy as we're move in forward. >> i just say climate change is an important issue, but it's not principally one, it's not one that's given principally to the
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fed to deal with if you will. other agencies have that. >> clearly that's the case i just want to understand if we're looking in a broad way at risk and understanding the data from that sort of lens >> i think that's the right lens the lens f doing, there are researchers all through the federal reserve system thinking about the longer run implications for the economy, financial institutions an all kinds of things. i think that's proebt research we're just globally at the beginning of understanding that and there's a will the of research going on including a significant amount at the fed. i think honestly for monetary policy, it's not a current consideration. it would not be something that would have any effect on the current setting of monetary policy over time though, it could for example affect the neutral rate of interest or the volatility of economic activity and things like that. those are things that we're
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thinking about for the longer term i think the public will expect us to assess any risk and use that assessment in the way we supervise and regulate financial institutions and also just potentially over the longer term in terms of f monetary policy. >> do you have an opinion on robustness of how u.s. banks broadly are analyzing that risk? >> and basely what i'm asking is do we need to start thinking through whether or not we need to self-impose or impose a stress test to look at the assets banks are holding and if they have some concentration of risk if they're not thinking through u that >> what we're doing now is rying to make sure that financial institutions that are in regions
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subject to severe weather have plans that are resilient to that a stress test that's meant to be purely informative wouldn't do what our c car stress tests do. we'll be monitoring it and i think we're doipg to benefit from some of the activity around the world we're seeing we'll try to learn from what the they're doing. >> we're seeing some places where it's harder to turn over a house in flood prone areas and if you had a concentration of mortgages you were holding in areas like that, that could pose a real financial risk. do you think that gdp data adequately gives us enough of a picture about who is benefitting from the economy and i guess in
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order, should we be looking at how economic growth is being distributed across the quun tiles of the economy >> it's really hard to capture gross domestic product in a $22 trillion economy it's quite difficult we, we actually, it's interesting to try to cut the income data. we're doing some of that now with our distributional financial accounts otheragencies are doing the same thing i think when you have the data, we have a tendency to want to cut it up different ways we're doing that now and i think it's informative about the way income and wealth are shared broadly speaking it's an important perspective. >> we're looking forward to s seeing that data >> senator cruz. >> thank you, mr. chairman chairman powell, welcome, thank you for your testimony we are right now experiencing remarkably economic growth across the country we have the lowest unemployment
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in 50 years. we have the lowest african-american unemployment ever recorded. we have the lowest hispanic unemployment ever recorded in your judgment, what economic policies have played the most important part in generating that economic growth that we're seeing right now. >> well, i think i'd be reluctant to single out particular policy. i'll say this. it's been a long, slow recovery. but it's come a long way we're now in the 11th year since we began keeping credible records of the u.s. economy, in the mid 1800s, the longest one and we hope the significant way to go. we've seen continued improvement. i think i would point to a couple of things these long expansions are common now and that really is because we conquered the high inflation. we've seen three of the four
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longest expansions in u.s. history have been b among the last four expansions so it's kind of become the norm to have these long ones. i hope everyone takes credit for the good economy we're seeing now because it's a really good place. i think it's worth noting. as you mentioned 50-year low in unemployment. wages moving up at the bottom of the scale more than anywhere else growth continuing at a solid base in the 11 year. i want efb to get credit for that not us so i have real concerns that going into 20 that we may see a slowdown in investments. as those allocating capital look at the political scene and look at some of the economic p proposals being put forth by democratic candidates for president. and i have concerns that may cause people to tap the brakes in terms of deploying capital. until at least after the
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election and finding out whether these policies might possibly be implemented. in your judgment, what would the likely impact by of the federal government implementing a massive tax increase >> smart, i'm pretty reluctant to be pulled into the 2020 election if you will forgive me. >> i don't expect you to come comment on the election, but you can comment on the economy and if a massive tax increase is good or bad for the economy. >> you know, that's, indirectly as you started out your question, it's about proposals of candidates and i just honestly, doen't want to get ino that business if you'll forgive me >> a number of candidates are proposing a wealth tax not just on income, but on
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wealth do you have any views that would follow from a wealth tax as high as 8%? >> it is really not our role to score or evaluate campaign proposals. that's what the cbo does and lots of other people do. we really try to stay out of that business. >> let's try a different thing former chairman ben bernanke in 2014 called the shale revolution quote one of the most beneficial economic developments. in the country do you share that assessment and conversely do you have concerns about the impact on the economy if the federal government were to ban fracking and shut down the shale revolution >> i would certainly agree i think the energy independence of the united states is something people have been talking about for 50 years and i
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never thought it would happen and here it is it's in the nature of ft to says to manage. environmental issues, all kinds of other issues, but it's been great thing for the country. >> and would it be harmful to end it is economically? >> i wouldn't be looking, i wouldn't be -- i think to, to shut down the shale industry, yeah, that would be, probably not be a good thing for the economy. >> thank you >> thank you very much, mr. chairman we know you have a hard stop here in about two minutes. i want to ask one final question we're in the middle of some p t pretty strong economic activity, very low unemployment. almost unprecedented economic stability. what policy or policies should we pursue to keep that going >> well, i think that the, if
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you're asking for my views on that, i think that the thing to focus on if i were in your shoes are the longer run issues we face particularly around labor force participation and growth it's about the potential growth of the united states we are seeing now how important it is and how good it is to have a long expansion with a lot of growth and how it benefits people across the income spectrum so i can't overstate the importance of that i think in the longer run, the things we need to address are labor force participation and productivity, which is closely linked to education. our workers need to be the skills and aptitudes to win in a global economy and those are the things that are going to matter for our children and grandchildren is what can we do now to keep the u.s. sustainable long er term growth rate as hig as it can be going forward >> thank you very much and thanks so much for joining
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us today and thanks for your service on behalf of our country. record will remain open for two weeks. we stand adjourned >> thank you very much >> and welcome to the halftime record i'm melissa lee in for scott wapner fed chair powell wrapping up his testimony before the joint economic committee, saying the new normal now is lower interest rate, lower inflation and probably lower growth. he says rates are unlikely to change on our desk today -- boy, these guys on the hill, they really tried to get powell to say lot of stuff commenting on campaign proposals for instance, ted cruz trying to push him into b commenting on the wealth tax he did comment on the ban on fracking >> he did less than i thought. i was like what planet are these other guys on that they're not asking about wealth tax.
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i thought for sure we'd come up. basically, the fed is on hold. monetary policy as it stands now, quote likely to remain appropriate. that would be the biggest deal i think he said there going on today. other things he said, the economic outlook is favorable. likes what e he sees right now the risks are from the global slowdown and raid wtrade war an cal policy is unsustainable. be preparing to help out the fed has less ammunition. not surprisingly dems and republicans are joined together in wanting, i'll get to that in a second, guys, i want to, hold that for a second. i want to get to the quote from the chairman in which he said you know, how far should we let it go? let's be humble. >> i'm very open to the idea that we don't knowprecisely is
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we have to have f significant humility and we have to let the day speak to us. the data are not sending any signal that the labor market is so hot or that inflation is moving up or anything like that. >> uyou feel like you're in a petrie dish? an experiment. now i want to show you fed probable ties which are ifs nating there were days not too long ago, the end of summer, when the probability of a december rate cut was north of 50%, now, that's the old chart sorry, folks it's 0.8% now. it's come down less than a percentage point then december of next year is like 65% for a single cut. but i don't even think that's real if you say i want to protect myself against a rate cut, throw a few rates out and december doesn't cost you much. so powell said we're on hold
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the market is in line with the fed being on hold. and the nation, there it is. and the nation still substantial doubting i think the key. we've engineered this pause at least for the moment and we also seem to have survived, melissa >> so what happened to the markets at this point, jon >> i think they like what the fed had to say fed chair had to say about inflation, too, and how it's been beaten, steven and melissa, because i believe that's what he said directly was that we have contained inflation and we've won the war against inflation. i thought that was something that the market would certainly like to hear because had we been lose thag war, or looking r forward if it looked like we might be facing that again in the near term, that would give more of an input to seeing higher rates, melissa. snor so in other words, flat and done is where we're at right now.
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>> the big e risk is lower inflation. you've this kind of, i don't know, you guys are in the options word, but no risk to the upside for r rates and the only possibility is that they go down what do you call that? a one way trade? special name for that? >> it's asymmetric >> listen. i'm going to burst your bubble a little bit the fed's not the story right now. it would be -- >> no, no, no, that's good are you kid iding me? not bursting my bubble november, i'm going fishing. it's great >> story is still china trade. he gave a nod to it. he said what i believe is true that cap ex spending has been impacted supply chains don't know where to expand their supply chains. so this is still china u.s. trade tensions and the reason the market has sort of topped off here the ls few days is because over the last four day, things have taken a more bellicose turn in terms of the
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rhetoric coming out particularly from president trump saying he's not ready to roll back tariff, which the chinese have said they want and even more to the point yesterday in his speech, he said if e we don't get this deal, tariffs are going up the markets so far clearly believes phase one will get sign ed, but it's pause >> the's been really right about that perfect at predicting what's going to happen in the trade war. >> he says sarcastically >> thank you for that, melissa appreciate that. they're 0 for 2 for the record, okay >> i get the sahr chasm, but i can't be dogmatically entwined with what the market's got wrong before i happen to personally believe that phase one will get signeded this is consistent >> no, get with it the market is terrible at predicting political outcomes. >> yeah. >> not only what's going to happen, but how to price it once it does. take a look at the idea that the market was absolutely sure that this was going to be terrible outcomes if donald trump was elected. it was awful at that and it's
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been awful at predicting political outcomes for trade it has the right price on what happens. >> i'm going make it clear i think phase one gets signed, but what the market's doing today is giving an opportunity today for participants to get in i think you'll see this rally. >> or this is the opportunity to sell >> i don't think so. >> where do you get a chance when markets remain close to record highs, the clock is ticking towards december 15th. no hint of roll backs at this point in terms of f f the tariffs. whether it be old or not putting the new ones into effect >> melissa, if we believe that, you've got to sell, i don't believe it i've been very clear about that. >> how about the fact we finished eed earnings season better than expected that's when the market decided after we did not continue to have an inverted yield curve and did not have what looked like recession nair earnings. the market could start to rally. we've had a strong month
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now the market says here we are, 3100 we take a break here what's to look forward to? if it's the tariffs being pushed out or rolled back or some type of deal, we don't have that yet so maybe at this level, which is 17 times forward earnings, maybe we'll just sofrt of stay here an wait and see if the picture clears up some >> i think what's important is even if we don't know what the picture is going to look like when it comes to tlrade, it's quite possible that the pique tensions are behind us and i think going forward, what we look at is we're seeing some signs of bottoming in global growth global pmis have uturned up. china's is in expansion territory gep. >> can can i pushback a little bit? this idea of a december 15th phase one goes away. the president puts on new
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tariffs. >> right >> it's not pique. that's still pique tension to come >> it would be ahead of us, but as we look at the slowing in the u.s. economy, particularly in the manufacturing, the consumer and services has held up and we go roll into 2020, we think the incentive is there for president trump to not e derail the economy. it is to some degree then we have the hong kong tensions, so i agree. it's dangerous to be betting too much on that we did way back in too so we have been neutral for the past few months just tried a wait and see approach we did wade back boo an overweight specifically in international dwopted eck quities where we see them geared more towards a b potential upswing and the global economy. better evaluations and possibly a tail wind from currency effects.
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>> if you go back six, eight, nine months ago, how many people spoon fed us the idea it's all priced in. we came in every f day and people would say this whole trade deal, this is already priceded into the markets and yet look at where we're at now >> you think we're going higher. >> i do. he was out there strong today talking about this is a combination for an explosive move to the upside and he went through u all the different reasons of what's dwing on right now. still, look at volatility. we're sitting down here at the 12 to 14 level the last couple of days now, volumes have been terrible maybe data will pick more, but i don't think so it feels like we started off november strong. we're averaging about 20 plus million per day in the options r world now 16 million that just shows you how far this has really fallen off from where we are especially if you go year to date, we average 20 plus million per day. and people are kichbd stepping back saying you know what, this
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market looks great and they might even believe this paul jones in what he's thinking could be the next lel but that doesn't happen >> he's saying this implication a lag effect of when the rates will take effect more efficient these days, aren't they? >> no, i think you have, markets are more ferefficient, i think e way that policy feeds into the real economy, i don't think there's a shortcut for that. i think the idea is you have to wait until interest rates get lower. people borrow and do the things they have to do. >> people are waiting for lower -- >> you did have a a decline in march rates. that decline in mortgage rates has to feed and it's only been, there's been three waves of stimulus first one is the fed got rid of f the rate hikes it was going to make second one is it stopped te clining the balance sheet. the third is it actually cut rates of of those three, the
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last one is the one that has more to give to the economy and you find that while people will go out and buy a house they wouldn't otherwise buy, there's spending that comes after that so the term diffused in monetary policy, it works with long and variable lags. that's shorthand for we don't though how it works, but we expect it works and don't know when >> i've got my bubble bursting gun out today and i'm sorry. i heard you on 17 times earnings i heard you on pmis and everything bottoming that doesn't matter if you don't get earnings growth next year. we're predicted to have 10% in s&p 500 earnings next year over this year. you won't get it if you get december 15th tariffs. if you don't get phase one signed i'm sorry. i'm oversimplifying this, but that's what matters right now. so the reason i think the it's going to happen though because we just had that course is because it's crazy not to happen the trade deal so we're going to have trump and lu going back and forth and
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navarro and lighthizer >> why is it crazy not to happen before -- >> because what will happen is you'll get a third year, next year, a third year of flat profit growth and this won't be 17 times earnings. this will be 14 times. that will look so ugly in the markets. going into an election year, it is crazy now i can't rule out crazy none of us is rule out crazy, but i won't invest on the basis of crazy it's just too insane >> you can invest to avoid crazy though >> as we invest, you're never going to have that 100% clarify. we've seen a shifting of in ours they're still out there. sure, we could have higher te er tariffs. but going r forward, we think the risk bs have shifted more toward the favorable direction as it relates to high er tariffs not going into place
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zpl last december, we know interest rates were around on the ten year around 3% then we, then the fed started in november and the beginning of december and then they've come down to 144 this year. and now back up to 192 or something like that. >> just real quick, steve. the mortgage rate at that time was the 30-year mortgage rate was 4.72 or something like that. last year. at this time now we're at 3.6 i believe for this 30-year mortgage rate so that's why you saw that dramatic jump in mortgage applications today 10% pump 9.8% of whatever for applications and that's the highest we've seen in a long time >> i wonder how many people, data gathering here. think there's going to be a deal december 15th or tariffs >> or before >> i think there's a deal. >> deal. >> show of hands >> deal. deal >> they don't have to call it a deal, but they push it out >> phase one
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phase deal or tariffs? >> i don't think we're getting a next round of tariffs. i don't know if that happens >> so no tariffs that's, 83% think there's going to be a deal 80% thought there would be no tariffs in the last go around. >> by the way, the president's got some oother things on his md >> the last two times, they were sure there was going to be a deal and there wasn't and there were tariffs put in place. >> they've gotten it wrong consistently >> i'm changing my mind. >> the other thing is what they've done is they've constantly increased the economic effects of the tariffs. >> yeah. they keep pushing up the amount that it decreases gdp and inflation. >> well with every f round and stumb stumble, the confidence gets
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eroded it's exponential not just that amount >> can i just make one other point which is that we're not talking about the fed here and i think what's interesting is congress did not pressure powell to do what the president wants him to do. which is to use monetary policy in the trade war as a way to devalue the currency the president does not have support it would appear to me of republicans in congress for how he wants monetary policy to work >> good. it's an independent organization >> but it exists at the pleasure of congress. he does seem to have sport frupt from congress. >> all right steve, thank you very much chief economic correspondent that wasn't the only thing going on on the hill today historic day the householding its first public hearing into whether president trump should be impeached. >> melissa, that hearing has just restarted after a short recess so far this morning, we've gotten through 45 minutes of questioning from the democratic committee chairman, adam schiff, and his top staff counsel.
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up next, devin nunes now is taking his time. 45 minutes of e questioning and cross examining of the witnesses and already we've seen a new revelation bill taylor, the agenting u.s. ambassador to ukraine said one of his staff members overheard a phone conversation between president trump and the ambassador to the e.u, gordon sondland he said the staffer could hear president trump ask about quote the investigations and sondland said ukraine was ready to move forward. >> and i think you said that after the call when your staff asked mr. sondland what president trump thought of ukraine, his response was president trump cares more r about the investigations of biden, is that right >> and burisma, yes. >> and i take it the import of f that is that he cares more about that than he does about ukraine? >> yes, sir. >> now this could understocut o
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of republican's chief talking points which is that much of the -- comes from second or third hand conversations about the president's thinking nbc learned the staffer f in question will be b testifying before closed doors on friday. as for president trump himself, he told reporters just a little bit ago that once again, this is a witch hunt, this is a hoax that he hasn't had time to watch. he's been too busy back over to you >> thank you on capitol hill. up u next, the hunt for value. a list of six stocks that are poised to rally. poised to rally. halftime is back in two minutes. ♪ ♪ ♪ ♪
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the eight names that have upside potential why don't we zip through them. >> so the point is if we put up the chart on what's happened in the last two and a half months, we've had this massive move for a number of value stocks momentum was way ahead for the first half of the year fn financials, health care, industrial, far behind on the top, momentum names are down at the bottom there's the s&p. value on top so the way we look at it now, you've got stocks that had been underperforming in the s&p and
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the value index. and we think that those stocks if this rally continues and they have growth prospects for the year should outperform the market so for example, dpooggooi o one. alphab alphabet it has 22 multiple next year it was really flat for about a year and we see a lot of opportunity there and it's selling for the same multiples proctor and gamble, coke, pepsi. american tower, it's the biggest cell phone tower company dploeblly. if global dwrout growth picks up, that's a name tharkd outperform visa on the payment side, we're see iing the continued consumer spending picking up. we like that stock here. blackstone >> what a run. >> been a good stock, but still has more to go pays out a nice dividend since they did that conversion
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boston scientific, a global medical device company, really broadened its portfolio. again, not a high multiple stock. and sales, which though it does have a high multiple, has understood performed in this rally and we think with global growth china, europe starting to improve, we see a lot of upside there. >> there are six names i stand corrected. >> great list. >> what do you think of that list >> love the list i loe love the two on either side the one with the higher pe i think it's as good as it gets out there so i think you're rig. it has lag trades at a really great multile and seems to be doing everything right. i own that name as well. >> how do we feel about being in these financials that have seen a run of visa, of blackstone for instance >> i mean, financials were beaten down for a while. so we've had a little bit of a run. you showed the value performance versus other factors and styles over a short period but if you
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elongate that charge, there is quite a bit of catch up to be had from value i think what's interesting about kari's list is there is some more typical growth namethat's t there's opportunity in both of those spaces i don't know that i'm going to call a broad sustained outperformance of value over the next 12 months but are we going to see kind of more similar performance from those two? i think that is quite possible and so good opportunities there. >> all right straight ahead, we're talking use' g tesla, and disney pl wveot your final trades half-time report's back in two minutes. whether your beauty routine is 3 steps...
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cisco's reporting first quarter earnings after the bell today. you own it they warned last time about telecommunications spend the presip tus drop in china business so what are you looking for? >> the same thing. okay i mean, is there any reason -- i can't think of any reason that the commentary you just stated would change you know, will they give good guidance forward i don't think so because they're been pretty conservative with guidance so they're not the ones going to come out and say, yeah, we think there's going to be phase one signed and then phase two and phase three. now, that begs the question why am i in it for a very simple reason over long periods of time, this goes up and it basically goes up with little stagnant periods of six to nine months which we're in right now so i don't think this is the time to sell it. even though i'm not expecting much from this quarter
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you got to be in it to win it, though, this is not something you want to time getting out of. you got to be an investor in this stock. >> i think it was calendar first quarter when cisco reported and talked about their ability to change the supply chain to avoid some of the impacts of the tariffs. and then the -- i think it was virtually the next quarter or the quarter afterwards where they said they were seeing a precipitous drop why are you laughing the highs and lows of cisco's management guidance. like what do you believe here? >> no, you think i'm smirking at you. i'm not. i'm agreeing with you. i mean, there is something -- something sarcastic in what you are saying and i'm agreeing with you that their ability to predict those things has note been very good and again, that's why i'm not expecting guidance going forward from today to be very exciting but also let's not lose sight of the long-term picture which is a shift going from hardware, from switches and router to software and security and internet of
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things they've been fabulous at that. >> yeah, i totally agree with jim. it's about your time horizon if you're talking about quarters, there could be some messy quarters when it relates to any of these tech companies that are in the cloud or 5g. looking out, though, this is a clear structural shift so if you have that long enough time horizon, you're probably okay in these types of tech names. >> by the way, i don't mind you smirking at me or laughing at me if pete laughs at me -- >> no, i never do that. >> i won't stand for that. >> tesla beginning to start mass production at its china factory clearing way to sell cars in the largest electric car market. also plans to build a factory in berlin that happened yesterday. and by the way, the stock no longer the number one short in the united states. shares are up almost 50% in three months you were commenting on the volume you were say seeing. >> yeah. since june when the stock was on the lows 177 or thereabouts, the stock has virtually doubled. i mean, it's phenomenal to the upside here.
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and why anybody would want to be short this one, i really don't understand, mel. all the news you mentioned, jeffrey's took their target from 300 to 400 not that they're the be all and end all but that's pretty substantial, i'd hold on to this one and indeed i do. i own tesla calls. >> the shorts might argue they want to be short because the stock has run up and it's only a matter of time before elon musk gets on twitter and says something stupid that torpedos the stock. but that's just the other side i mean, are you worried about that at all? >> i think you always want to be worried about that, yeah i mean, that's why i think the way you play it whether it's in calls or something like that, that's the way to play it because at least you know your exposure levels. >> i think this is a stock that obviously has a cult and the cult went away for a little while and now they're back it can get to an all-tie time h. if the trade deal doesn't happen, not good for tesla. >> why does it matter if they're producing cars in china anyway
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>> because i think that china is a market for their, you know, it's part of the growth plan because he needs the global economy to be strong for his -- >> oh, it's the economic -- that will affect tesla. >> correct. >> got it. >> disney on news the company streaming service has already surpassed 10 million subscribers. wow. 10 million in one day. we should know, though, that verizon was giving away some free subscriptions. >> for seven days. which makes a lot of sense they would do that. the numbers might be a little bit -- >> elevated. >> feel pretty elevated. yeah exactly. i mean, that's what it feels like but we talk about verticals all the time this is part of that whole strategy of avertcals that are paying off and i think just -- just a headline alone is something that i think will grab people and maybe even grab attention to actually fill that even more so it could be really interesting what happens with disney and it had pulled back enough, mel, this a it seemed like a lot of people said, you know what, a
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little pull back off the highs they wanted to get in. they got back in this has a lot of room i think. >> netflix down one and three quarters percent should we look at it that way? disney wins. netflix loses? is it as simple as that? >> it's not as simple as that. disney and netflix can win but not all of them. there's a lot of players. >> time for final trade. >> cvs we've talked about it a lot this year some people say you got to wort 2020 that's too far away. right now, great momentum. great valuation. cvs. >> kari. >> boston scientific i mentioned it before. 9% growth rate 22 times earnings. >> megan. >> international developed equities i mentioned it earlier we just went overweight in the space. they're more geared toward cyclical recovery and for dollar based investors, if we get better growth, the currency should help as well. >> doc. >> right in megan's backyard, insight. incy oncology, delaware-based
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bio pharma. >> sticking with the financials, usb. ubs -- or usb. >> u.s. bank corp. i'll see you tonight at 5:00 that does it for us. we'll cover cisco, as well as walmart. "the exchange" begins right now. >> thank you welcome everybody. i'm becky quick and i'm in for kelly evans. fed share j powell telling markets the new -- lower inflation and lower growth around the globe so how do you profit in this environment? plus, there's one sector in the market where nearly every stock is up more than 40%. i'll tell you what it is and if there are still opportunities to buy. plus, they've got search, maps, e-mail, youtube, home devices, smart devices, health data, and now google is getting into banking as well. we've got th


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