announces commitments for orders, options for future orders this is what you get with a due only you're east going to go to airbus or boeing and a couple of airlines have said we're going to boeing. >> bernstein has a report out issii asking whether that duopoly is over and the answer is essentially no let's go to the judge with blanc fund >> i'm scat wapner front and center this hour, a halftime exclusive, former goldman sachs ceo lloyd blankfein, we'll cover it all over the next 30 minutes we fwin with mr. blankfein's reaction on cnbc by presidential candidate elizabeth warren

>> it is time for a wealth tax in america i've heard there are some billionaires who doesn't support this plan. >> theville ville ification of billionaires makes no sense to me >> she probably thinks more about cataclysmic change to the economic system as opposed to tinkering. >> lloyd blankfein responded on twitter. >> i can watch that over and over again >> where were you when you first saw that >> i was kind of brushing my teeth in the morning where i normally watch the channel i was surprised and flattered to think that i could play such an important role in the presidential campaign. >> were you angry? >> no, i wasn't angry. i'm a little bit staggered that it gotten to this point of kind of name calling. how provocative was my statement that i would tinker with the financial system and i wouldn't

explode it and that becomes in this kind of polarized world, that's a very radical statement to say you wouldn't blow up the best financial and economic system in the world. >> let me read from your tweet, if i may you say you were surprised in the tweet. you go on to say, "not my candidate but we alike on many issue, vilification of people may be good for her peopcam bait the country. maybe tribalism isn't the answer." that's a comment toward her native american claim.

>> i work for the world's financial institutions, i have name recognition my political position is known i used to be a kind of a moderate democrat and now without having moved anything, i've become like a -- in their eyes kind of a right winger because i don't want to blow up the financial system it's an odd time where we're shifting a bit from populism where you are want to represent underrepresented people, people that feel they didn't have a voice and they want to appeal to them to a kind of demagoguery where in addition to trying to help underrepresented people, you're labelling people as villains who may or may not have a role in the problem just to vilify them in order to improve your prospects so the migration from populism to demagoguery is a bit of a dangerous moment i just fear for the political

process in the united states, that's all but guess what, we'll survive this and we'll get through it. there's a cycle to it. >> you do say in the tweet you're aligned on several issues, on many issues, the word you used on what issues are you aligned with senator warren on >> i believe strongly that the economic system should be fair, that people shouldn't be underrepresented in receiving the fruits of wealth creation. so i'm for progressive tax, i'm for most of the social issues that she'd be for, lgbt issues, other friender righ gender righ. but at the end of the day i recognize the great success of the wealth creation machine and less somebodify successful parte weather distribution machine we shouldn't have unworkable, demotivating kinds of taxes that will achieve equality by reducing everybody's level of wealth

>> i'm wondering what you mack of so -- make of the general tone of warren versus wall street. i don't know if you saw the interview lee cooperman did on my show where he literally broke down in tears thinking to himself i'm somebody who spent the better part of my adult life trying to give back, i've taken the buffett giving pledge, i've sent 500 kids to college you know what i'm getting at >> yeah, i have a thicker skin i don't want to speak for lee. he's a great guy, a very philanthropic guy, all the things he says he is, a very rasal gra -- rational guy, he was responsible for research at goldman sachs. he put out a very reasoned

paper, is he hard to know but it wasn't -- somebody just taunted him and made fun of him and that's the environment that we're in so it becomes a symbol. very hard to at this moment to just -- somebody says you're a bad guy and you go back and say i'm not such a bad guy that's not an argument that people win so, you know, i'm not dying to be here. i could be here. it not bothering me. given my choice, i'd just, you know, if i could i would just bury the match et a-- hatchet ad move on. >> what's your take on the wealth tax >> i can understand where the wealth tax is coming from. it's a very good way to share the rewards, share the fruits, which you can achieve on an aggressive tax system. an estate tax at the end of death would accomplish the same thing. i understand where it's coming from, i understand the goals the problem with it is is it's completely unworkable. forget about the constitutionality. where it's been attempted, it's

hard to settle an estate often can take many years to settle an estate how do you mark to market your entire wealth every year, farmers who own farms, people who own homes. it's not just fancy people with tens of millions of art collections, it anybody with a farm or a home would have to establish what that home was worth every year you'd spend years fighting about it and next year you'd have to do it again. >> did you think about whether you were going to respond to the warren ad or was it a spur of the moment thing i asked the question in the context of and i asked lee coop areman this as well as to whether you all think you're playing right into her hands by responding and giving her more material to play around with >> i'm not living to respond to elizabeth warren or anybody. my whole response consisted of 280 characters in a tweet, most of which wasn't addressing anything that she was saying so this is not a big moment in

my life and i don't know -- frankly, i don't know what it means. i started off the conversation by saying i was a little bit in a weird kind of way, it's a little bit flattering. i didn't think given my noncombatant retired state, i didn't think i could be that important for her to label me that way >> if i were to ask you, are you surprised that there's this still lingering animosity in certain corners of the political sphere towards wall street, that you guys are the ones who caused the crisis, not you and goldman, but you guys collectively, you caused the near destruction of the financial system and here we are today and people can't forget about that? >> i think people who are responsible at the center of the financial system going back to the financial crisis, going back to the depression, going back to throughout the history of mercantilism have always find their moment of vilification

because people who build things, you can see it, but the people who are responsible to make sure the right things get built in the right time and the right money is spent for it and when mistakes are made and the wrong things are built to repossess those assets and recycle the capital, they're not always loved. so people at the center of the financial system play a very, very important role in allocation capital and allocating capital, allocating risk but not only is their work not always appreciated, but the people who find themselves on the wrong side of that allocation have a lot of disdain for the people at the center of that process >> would we be here today had some gone to jail as a result of what happened during the crisis? is that part of this lingering animosity? >> i don't know -- no. i think if we never had a financial -- i seem to recall that before the financial crisis hi to respond to these kind of questions as well. so there is always, again, some

kind of -- some kind of resentment in the worst time, lack of appreciation in the better times, for what the people who are at the center of the al occasion process of the financial system again, risk, capital, people -- again, when you have the role that i had in my old firm, you have people who have capital to invest and people who need capital for their businesses the people who don't get the capital resent your decision not to give it to them and the people who have the capital to invest may not like it if after the fact it didn't go to the best place possible. >> this whole thing has really spurred a conversation about capitalism in and of itself. we're discussing it more i think recently than we have in the most recent past is the system broken does capitalism need a fix >> no, it's not. look, we're sitting here there's a lot of unusual aspects to this moment in time where the

passions and the -- the passions are the greatest at a moment when things aren't in really the greatest distress we've ever faced in our lives i think the two parts of the capitalism kind of, if you will, socialism debate are really how do you allocate the benefits and the product of side, what you've pro tuesdayed oduced out of thei think that's very, very fair game for conversation. the other part is socialism versus capitalism is how much of the economic system should be run by the government. there it's almost hard for me to believe -- only people without experience in this matter could think what we really need is to have the government run a much bigger section of the economy because i know i really want the transportation system to be like amtrak all the way through or housing to be like the new york city housing authority, which is

government-run housing you know, there are great people who work for the veterans administration, some people get great care there but i don't know that everybody wants their health care system to be run and waiting on for weeks for an appointment like some of our veterans do with the v.a. system for me having our government run more and more of the economy is not a way anybody would go who ever experienced the government running a bigger part of the economy. >> this isn't necessarily a conversation of capitalism versus socialism it's the likes of a ray dalio or marc benioff suggest that capitalism itself could be tweaked, maybe my word more than theirs >> of course everything can be tweaked. these are nails. i tried to break it down into the allocation -- the allocation or reallocation of wealth on the one hand or house of representatives of the system should be run by the government is two bifurcated things

the label is distracting i think that's what the debate is about should there be private health care or the government administered system? on paper it looks like the government system would be effective but it's that profit motive that makes sure you get the best people in the jobs, people work hard, longer hours than they should, you get rid of incompetent people, you reward people who work especially hard or are especially good, you shut down things that don't work, even if it's in some congressman's district the private sector can behave in ways that people in government cannot so no shade on the people in the government my dad worked for the post office but again, look at the post office >> so how do you think about the issue of incoming equality people say it's the preeminent issue of our time. it's certainly one of the

principle ris bks to the market >> inequality, we'd have to have less of it lower interest rates, people who have assets get richer, people who don't have asset aren't benefit federal deficit from the asset prices uber comes along and officially every driver never has an empty car. they're driving around so maybe you need 30,000 making this number up but maybe you need 30,000 fewer taxis in new york city than you had before well, that value goes to the shareholders and the initial venture capitalists who created uber they get richer. meanwhile 30,000 cab drivers lose their job so there's a migration of wealth from labor to capital. so that gets repeated because of technology people who create the technology get the wealth that comes from

needing fewer people to do the job and so there are fewer people employed. now, i'll tell you what's happening at the same time other industries are being created, there are more services and we have low employment in this country and over time low unemployment means that new ideas come along and they have to bid up the wages of other workers to pry them from their other jobs that's what's happening. so wages are starting to ride. do i wish it had converged sooner yes. should we wait for that to happen no, i'm for tinkering with the system >> do you think ceos make too much money >> do you think television reporters make too much money? i do >> yeah? >> yeah. >> i don't know if television reporters are making such a great amount of money and those at the bottom of the television aren't making -- ceos are the wealth of ceos is going up at an amazingly high rate relative to

the rank and file. >> i'm just guessing that if you -- that someone must have decided that you in this seat draws more viewers than if you and your cameraman switch places and therefore you command a higher wage for the job you do, even though when i chatted with the fellow back there, he seemed -- i liked him a hell of a lot and probably works hard. >> but the spread between what i make andy makes is probably way small compared to what you make compared to the rank and file or what any ceo makes compared to the rank and file, no? >> it's widespread somebody must have the misapprehension that somebody in that job -- >> do you think it's out whack, though >> out of whack from what? >> i'm asking what jamie diamond was asked by leslie stahl. >> if you film a movie and get the number one box office star

to be in that movie and you think what is that movie worth with the number one box office star in it versus the new 40 box office star? if someone thinks they can make an extra 50 million by having the number one guy in it, what's that guy worth as a difference over the other guy every industry has its own market mechanisms. i don't think anybody should apologize where they end up in that process and then you can ask them what they do with the money, whether they're good citizens, whether they give back to society, whether it serves an important social purpose or it's counterproductive. i'm not criticizing you for asking the question, although maybe you shouldn't ask it ten different times. >> well, i think it sort of gets to the heart of why we're having the conversation about income inequality why people like elizabeth warren put people on wall street -- >> i don't think the whole economic system hinges on whether taylor swift or the nfl

quarterback versus the lineman, what the relative proportion i think it's an important thing if you're talking on the side about that particular industry or what it can afford but i think the real issue for the overall economy in a macro sense what should be the government percent of participation, whether the government should take over health care and housing and then the distribution question is one of calibration and degree and where i am on that spectrum, which was the observation that made was that i may be in the middle -- i'm not an extreme eastbound of that spectrum i grew up in public housing in new york city, my dad worked nights at the post office. i might surprise you in that i never behaved in my life to maximize my income over other conversations. so i might find myself kind of as a directionally on line with people who would like to see a more equally calibrated kind of

distribution of the system but i don't want to do anything to impede the wealth creation of the system that's a little bit what the debate about wealth should be for me >> you're not supporting elizabeth warren who do you support >> rockefeller i have nom complaints about meep has not criticized me lately >> if he did, you would probably have a tweet about it. seriously, who are you supporting >> i'm a militant moderate and also not just for -- not just on the outcomes but i'm also for that because i like the stability of a state you know, everybody today, you know, in the last administration produced somebody who just the first day in office wanted to just undo everything that was done if the government changes in the next election cycle, the first thing they're going to do, executive orders are going to fly and just undo everything

else we're going to go back from one extreme to another the other good thing about moderation is that it creates a more -- it creates a more stable environment going forward. so, radical comment that i made that invited that negative comment was i would tinker with the system but i wouldn't blow up the economic system and if i had to say over again, i would just add i wouldn't blow up the economic system that is generating -- that is really in fact the most successful and has the most growth it very ra it's very rare that the biggest is the most nimble and most flexible and fast growing, but the united states economy is all of those things among developed countries so i would take pride in it while recognizing there are flaws that we should correct. again, we're in a very, very political moment and again, at the juncture between populism

and demagoguery -- >> when i say dangerous, i don't want to produce another reaction, i'm just saying i wish people would call out that kind of thing i mean, the only thing -- the odd thing in that commercial, i'm used to wall street getting pelted, i'm used to firms being named but going after specific individuals who really didn't raise their hand, are not really that engaged in the process like my friend lee cooperman and, you know, it just seems to me it's taken a new direction, is that really good, should we applaud and clap for that? i'm not so sure. >> you're an equal tunopportuni target between warren, sanders and trump. >> i'm glad i could play my role in unifying the country. >> how do you think president trump's done >> listen, i'm sure there are villages in the amazon that haven't seen electricity where they're sitting around a table talking about president trump every day. this is a very well-trod

territory here i would say that on economic issues, if you look where things are, i think he's done pretty well and it crazy not to acknowledge that, even if you clearly don't likeless temperament and the burdens he's putting on our institutions and the stresses in the fabric of the country and the poor role model in a lot of ways he's setting in the country >> you were supportive somewhat of his tariffs you said i don't think he's wrong here, tariffs might be an effective negotiating tool china relies more on trade and loses more >> i'm a registered democrat, i was a hillary clinton supporter, but i would always -- i would look at what works and go along with it. on the issue of tariffs, you know, again, people -- it's put a burden on certain people in

america, that's for sure but i give him credit, i give the president credit for taking on this issue of how to get china to confirm to standards of international behavior in the trade arena. he's taken that on other people have just punted on this if those people have better ideas for how to do it, let's hear them. it very easy to stand on the side and say, well, americans are getting hurt in the process. of course americans are getting hurt in the process. the observations i make about these sings -- let's relate it we just had a strike at gm let's relate it to a labor strike the union strikes gm does the union leadership know that workers are going to get hurt by that strike? of course. they're going to forego wages. is gm going to get hurt? of course gm is going to get hurt why does labor do it if they know their people will get hurt? gm thinks it's in a more

powerful position. labor thinks it more powerful. how do you get a market to stabilize so they can get to a point where you can have a market-clearing settlement clearly in a labor strike, the worker will lose wages in order to get the other side to move towards its side for a compromise that's what's going on here. there's pain that we're going through in order to inflict the kind of pain on to china that will make them compromise and get closer to our position >> it hurt the manufacturing economy undoubtedly. >> it's hurt manufacturers, it's hurt farmers we should nationalize that pain, which i think has been sought here when you give subsidies and pains for farmers to compensate for some of their farmers, you're nationalizing -- but

nevertheless, i can't see any other way of bringing our negotiating adversary here, china, to the table or closer to our position unless we convince them that they have more to lose by recalcitrants than they do from operation. >> there's a political ramification from the president, too, as we get closer to the election >> everything has political wram if -- ramifications. they have to be digested >> your former colleague suggested the president will lose credibility with the chinese if he rolls those back >> i'm not speaking for the president or the chinese i'm saying i understand why having to go down the road of even suffering some losses on yourself and some burdens on yourself are necessary and again, we don't often get into trade wars but we often get

into labor strife so i'm making the analogy. so i see the analogy >> let me ask you about the fed. obviously jay powell has endured a tax from the president who is now arguing that he be fined with negative interest rates how do you think jay powell has done do you think they've been right in cutting rates the way they have in what do you make of the president's attacks on the fed >> i would say from a different perspective, i wish the president wouldn't attack an institution whose credibility is part of its -- is an important part of its influential when we want an influence, respected fed for all sorts of reasons that are clear. kornd, if a weird way, it gives jay powell a way to resist that and come out of that with the institution holding up its independence i'm not suggesting that it's

good or desirable, but so far jay powell has handled himself very, very well, his temperament has been fine and i think his responses have generally been good should he in hindsight have forgone the last year's income rate rise, could we have been -- some people would not want to -- one more rate increase more or less isn't going to determine whether he's doing a good job as long as he respond to the data and as long as he keeps himself insulated from the political pressures. i wish the political precious weren't there but i commend him for resisting it and although the institutions are being attacked, the institutions are holding up >> let me ask you about the company you use to run, goldman sacks. how do you think david solmomon is doing

>> i'm not going to comment. i'm a good leaver. by the way, i will say i know who played the biggest role in putting him in that job and that was me so i'll take credit for that but i'm not going to comment on what he's doing after i left >> let me ask you this way then. there's a new article, i don't know if you saw it in "fortune" magazine, "knocking down walls at goldman sachs." the implication is goldman's growth had slowed -- >> goldman's growth had slowed >> what do you make about the way that it's framed, that solom solomon's job was to get it growing? >> it's very market reactive the market like stable income. we were the most recent private

partnership. you can make money one year and not the next year and then in five years make a ton of money and everybody's happy. this was started the march into consumer businesses and it was started over the last couple of years. and, you know, we were good partners in that and now he's doing that on his own. our business, again, needs to evolve and always does i commend the efforts to grow revenue. that's always our job. >> let me ask you about this quote from mike mayo goldman sacks was a sachs was a its own success. >> that's an unusually flattering comment from mike mayo >> i think he has goldman stock on an outperform at the current

time >> thank you, mike >> look, everybody is always a victim of your success things work and then you don't have the same motivation to correct or change things we stayed in tact during the financial crisis there was one so almost exclusively geared toward advisory work and capital market activity as opposed to commercial lending and deposit taking, which is generally more stable, safer activities we weren't even in those businesses so clearly there has been a need to evolve certain other things in different parts of the kind of cycle that are goingto benefit one business over another. i'm proud of our firm, i'm proud of the great people that we have working there. we still attract and retain the best talent. i feel very good about it but there's always a need to improve things and to move on and to always, always grow revenue and

resources and opportunity. >> on that note, how do you relate to that -- >> anything on my watch is part of my legacy there's 50 things that happened. >> this is a big one, though >> we've had a lot of things that go on it will work its way through it still in the process of -- we had a bad egg out there. then the question for the instituti institution -- and everybody from time to time will have a bad egg. we have tens of thousands of people we hope that everybody is pure of heart, it doesn't always work out. and then the institutional test is do we have the right processes and procedures, compliance and culture that should have, even though it slipped through the cracks this time, how much at fault were we in allowing this to happen and

that's what goes on and that is what plays out here. you know, i have confidence in our institution, i think we are on the right side of those culture and kaescharacteristic d compliance things and you look for flaws and we'll move on. i can tell you the crisis -- we don't have enough time left to enumerate all these things goldman sachs is big enough and influential enough, there's hardly anything that can go wrong in the world where we're not influenced by it, involved in it, often very, very involved in it. to be in my seat and my successor occupies means you have to work through these things and that means you have to make the changes and responses to minimize the chances that bad outcomes happen again. >> i know you have to run to the airport. markets are at record highs and

we're setting new highs almost every day it seems what's your view of the market are you comfortable with where stocks are >> oh, god, i don't think i've been comfortable since 37 years ago when i went over to finance. i'm looking around every corner, always waiting for it and i won't hear the one that is, although after it happens, 80% of the people out there will think i knew in advance and the other 20% will think we caused it so the fact of the matter is but if you look at it and you ask me what is my best sense, low interest rates, relatively high growth, no demand to raise those interest rates and so i'd say there's a very, very good macro backdrop now, the big risk is you talked about low interest rates well, clearly if you have a commodity and attach a zero price to it, how does that get allocated efficiently and safely and so is capital going into wrong places are there bubbles being formed

i don't see them but you never do until after the fact when everybody in hindsight remembers having seen them could it be credit but that doesn't feel that way maybe real estate. that's kind of come down other kinds of asset prices, ipos, tech, high prices with no revenue, that's kind of deflated >> corrected itself somewhat >> so what's going to happen that's going to burst the bubble and create a huge explosion? i don't see it but that doesn't mean it not there. >> impeachment >> you know, i save even that process, i think statistically it's very likely that there is a favorable or positive vote on impeachment and very, very unlikely that there's a vote on removal. so i don't think the financial markets are really getting set if that formulation changes, then over time that risk will accrete into the market and the market will slowly adjust. the only time you get a real burst and an explosion is a

sudden surprise and a sudden change in the -- that wasn't anticipated for which the adjustment wasn't made i'll give you an example of that recently was when donald trump got elected when everybody thought hillary clinton was going to get elected and so then going into that election, nobody saw -- everybody was thinking higher taxes, possibly more regulation and all of a sudden overnight lower taxes, less regulation and that adjustment was kind of a radical regulation some people like that because stocks went up not down on that but the reverse of that could happen that kind of surprise. >> thank you for being so generous with your time today. it's nice to spend this time with you straight ahead on the half, terry duffy is the cme group's chairman, the host of this event down here. halftime is back in two minutes.

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i'm bill griffeth. boeing 737 max just got another boost at the dubai air show today. it was an order from kazakhstan's newly launched

budget airline they'll purchase 30 of those jets with a list price of $3.6 million. >> in hong kong, the standoff is not over yet police say about 100 protesters are still inside about 600 protesters walked out earlier in the day police allowed those over the age of 18 to go home after they were questioned. >> and netanyahu does not consider israeli is thesettlemeo be a violation of international law. >> and a career performance last night, doncic becomes the second youngest player in nba history to report a 40-points trip

triple-double, 163 days younger than when lebron did it back in 2005 by the way, the boss called, scott, he thinks you're overpaid >> i knew that was coming, bill. i knew it. i'm sure there's many more things being said on twitter as well our next guest is the host of the leadership group thanks for being here. >> i appreciate it very much >> you have a wonderful cross section of people from many different industries how are people feeling about the economies and the markets? >> you just had lloyd on and i think you did a really nice job, not on on cnbc but yesterday with a constituent of our clients. i think for the most part people are feel overall good. we're seeing volumes dip initially which tells me there's a lot of people on the sidelines.

i'm a big fan of your show and watch it a lot and you've got traders that have been talking a different position, than they have over the last several years. so that's a lot about where i think the market's at right now and that's where you're hearing a lot of septemberment from different places in the asset classes. >> there's a suggestion some of that money will come into the market by the end of the year and push things even higher. do you buy that? >> it's not for me to predict whether money will come into the market i look at prices and flows when you look at the amount of volume coming in, it's a lot less than it should be when you're having these enough record highs set every time or record lows and interest you're seeing volumes dip off, which means one thing, they got to come back in eventually >> the other thing you watch closely is volatility. >> i do. >> which is almost nonexistenont

>> some of prices are not reflecting nonexistent, even though the daily volatility we were watching has seemed to taper quite a bit over the last month or so. >> do you think that comes back? >> i do. i just think there's too many unknowns in the world. it almost impossible for volatility not to come back into the equation you have uncertainty in britain, you have an election next year it couldn't be more polarizing on which way the markets could go because of the direction of who is going to sit in the oval office so that's going to create uncertainty. i think 2020 could be a very volatile year for a whole host of reasons >> i'll play off another thing since you're referencing it, maybe all of those risks are mitigated by one thing and that's central bank easing, not on here but everywhere else and maybe that's, pardon the pun, the trump card that supersedes everything >> you know, i've heard you and your colleagues talk about the fed quite a bit. and from where i sit i think how much lower can they go and how

much of an effect can they have at the overall marketplace i think right now they have zero effect i don't think the u.s. is going to regular tiff rate and i don't think they're going to raise any time soon. what role is the fed going to play in the united states? there's $14 trillion getting negative rates globally today. so they're going to look for different asset classes to participate in >> wouldn't you in some respects go out further on the risk curve if you knew you had a, quote unquote, insurance policy in your back pocket of the fed if. >> i don't think it's an insurance policy i just have a ditch view of it any time you buy insurance, you normally know what it for. if you're telling me the fed is going to bail me out and take the equities higher, i don't believe believe that here we are with rate cuts over the last two sessions. the market has said we don't care what the fed does

>> where do you think the rates are going ten year >> it's hard to say. i'm here to manage the risk but it is interesting that it's hard to believe they're going to continue to stay inverted and i have a hard time thinking rates are going to stay this low forevereverybody's watching the influence number we it doesn't mean people don't have great exposure. cred dr we are 46 trillion in mortgages. people need to manage that risk. even though the rates may not be going anywhere in the near term, you and i don't get fed fund borrowing rates. >> leap year making into bit coin even further opgs starting next year? >> i'm a big believer that options help the credibility of any futures contract to build that ecosystem of futures and options together we have now listed the futures

for a year it's become somewhat attractive to people. so the options of a natural thing next to do it doesn't mean we're going to go into other cryptos. so i said from day one i will walk, not run into this. i don't want people who have never traded futures. >> terry, thanks for having us that's terry duffy, chairman of the cme group down here at his conference in naples, florida. and coming up, michael harris will weigh in. >> and i hate to say i'm giving you a raise. i need a raise that was pay per view tv i just want to say fabulous interview. so there, thanks i'll send you a check. it's in the mail tech stocks on pace for their best year in a decade but there's one indicateor that

could signal trouble ahead and his agency is taking the lead on regulating crypto currencies and boeing's latest headache could lead to the redesign of thousands of its planes. that's all ahead on "the exchange." the halftime report is back after this ugh on these roads ugh on these roads shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

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as we've heard from several of the other guests today and frankly a lot of people at this conference, we have two macro themes coming to a head. i think there's a lot of people who have had a good year and it's very possible they've got their finger on the cell button and they may take some profits if we see a spike in volatility in december.

>> are you positioned for that >> we have several defensive trades on. we're short energy, long precious metals like gold and silver we're also short a basket of emerging market currencies versus the dollar. we continue to be long global equities but some of our faster, longer, shorter-term models could get us back in trade >> you're a quantitative hedge fund you have about $3.5 billion under management, is that right? >> correct >> the trend feels higher for equities, does it not? >> absolutely. some of our longer-term momentum strategies are going to be following equities higher. you blend quantitative macro models, you blend shorter term strategies to help you be more nimble when markets tend to turn you've mentioned in your show already central bankiesin easin.

we're long in bond markets, short the currency we don't have that trade on here in the u.s., though. we believe the fed will continue to stay on hold and be data dependent. it entirely possible we see more easing next year but next to the chagrin of president trump, we will probably not see an easing by year end >> the fed needs to become more engaged, it's going to get more gauged >> -- engaged >> i think all central banks will get more engaged if we see a pick up in decline that's why it's so important to see if things are getting better or where is. the chinese may decide they want to negotiate with a new president or the same president after the 2020 elections >> you say you're looking for a

return of volatility but you're not looking for a return of the kind of december we had last year, are you? >> i don't think it's going to be as dramatic as we saw last december there are a lot of people who have made a good amount of money last year and it's entirely possible they'll take profits and lock in the gains. >> and there's the likelihood or at least the possibility i should say of a chase, a performance chase that counters some of the profit taking but we'll see. good to see you again. >> you as well >> mike harris, the president of wners ll and company joining u do he. we'll take a quick break and talk to the traders in our headquarters straight ahead. even if sometimes we're not. sundown vitamins. all clean. all the time. is that pgim, we see alpha emerging in the trendsete? driving specific sectors of outperformance.

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welcome back to the conference here in naples, florida. the investment committee is standing by. guys, it's a retail kind of a day. depot is under pressure, macy's, kohl's >> home depot wasn't as bad and kohl's was way worse heem home depot was at its all-time high it had to be a perfect print and it want. underneath the surface, the 36 comp, they actually did 4.8 in a comp that's pretty good it was very close to

expectations the implied guidance is at 5 comp it's not down enough for me to buy or add to it but it's something i'll watch and look to buy if it continues to fall. i think kohl's is a mess, amazon, private label, the loyalty card, it just not driving traffic. that's a real problem for them >> i'm having flashbacks, steph, to you talking about say a mcdonald's or a disney and looking at the runs that those stocks had and lightening up your positions, in fact selling out of mcdonald's altogether, wondering whether you wish you would have done the same thing with a home depot after what you mentioned was a run to an all-time high. >> i think the duopoly is unique to them. 22 times is not cheap. you're absolutely spot on but i don't want to give up on it.

housing, the numbers were quite good that's a theme i still like. >> doc, what's catching your eye on a day where the dow is down the 90 or so >> t.j. maxx, new 52-week high ross stores is just way from a 52-week high and i'm looking chewy in the pet space they are buying the 22 1/2 calls, big nuls there, really big. and the stock is moving up it's a surrogate, i'd probably be that about a month, scott >> that was your unusual

activity for the day thank you for squeezing that in. we appreciate that how about you, joe >> market bounces back once again after home depot's earnings if there was a reason for the market to go down, home depot gave it to them this morning i'm out of masco that's an area of concern. tjx, i purchased that today. consumers fine, especially if you're looking a the off price the market is enjoying growth and value and of course technology once again. so critical to the comments of the last few days, i think the chase for performance and the higher move continues. >> jimmy, let me ask you your reaction about this expectation of a return of volatility between now and the end of the year when frankly we've been talking about whether it's a chase for performance or the trend feels like it higher how do those counteract one another. what do you see?

>> conceptually what they're seeing makes sense but empirically the markets are behaving really well despite the fact that we've gotten wobbly on trade and this should be the catalyst for volatility and it isn't. i think you got to take the easiest, most simple explanation, which is that low volatility will continue through the end of the year. that's the path of least resistance, higher markets, lower volatility >>. >> well, we'll see that's what makes a market, different points of view let's do final trades before we go steph, start us off today. >> stanley black and decker, the stock is down in sympathy and it's a great opportunity they've done enormous restructuring, almost $1.80 in restructuring and i like the m & a strategy as well >> dr. jay

>> scorpio tankers, a lot of up buying yesterday and today >> scott >> tjx is there, master card and paypal growth is coming back >> jim >> cvv contins continues to do l despite political pressures. >> that does it for us here in naples, florida. "the exchange" begins right now. >> thanks, scott welcome to "the exchange." i'm andrew sorkin in for kelly evans. technicals say we are way overbought is a bubble forming? the consumer may be strong but that doesn't mean everyone benefits a look at the haves and have t nots but we