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tv   Countdown to the Closing Bell With Liz Claman  FOX Business  June 28, 2019 3:00pm-4:01pm EDT

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of homestead in florida. let me ask you this. if you are a corporation, your employees are walking out on the job not because of working conditions but because of philosophy, what do you do? charles: if you are one of those companies, you deal with it. thank you, susan. we are dealing with the market drifting into your hour, liz claman. we are holding on to thin gains. liz: yeah. i would call that gains. charles: great point. liz: it's how you twist it. thank you, charles. have a good weekend. you guys can't leave yet. okay. we know friday is the time everybody wants to move but we've got breaking news. investors are sitting on pins and needles as president trump's meeting with chinese president xi jinping at the g20 in osaka, japan is just hours away. this afternoon tokyo time, the president rubbed shoulders as you see on the screen with world leaders from saudi crown prince mohammad bin salman to shinzo abe. this is the same family photo, as they call it.
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the president has completed meetings already with russia's vladimir putin, the japanese prime minister, and india's modi but it is the one-on-one with china's xi jinping that has the potential to be the most market-moving event. so it will be very critical for wall street, the u.s. economy and the rest of the world. bank of america merrill lynch analyst says if a deal is struck, the s&p could sail over the 3100 mark but if president trump doesn't like the tone of talks and perhaps slaps new tariffs on more chinese goods and materials, the broader index could drop 5%. that would equal roughly 150 points from where we are right now. and there is late-breaking news from osaka. a trade deal could be on the verge of being struck, but it's not between the u.s. and china. we will take you there for the up to the minute developments. china, a big topic during last night's democratic presidential debate. hear what some of the 2020 candidates have to say about the way president trump is dealing
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with the trade tensions. we've got silicon valley legend t.j. rodgers and craig allen here, exclusively, both of them, to game tonight's epic showdown. on this final trading day of the week, the month, the quarter, yeah, forget what charles said, thin gains. we're holding on to ground here as financials and energy stocks lead the street higher but it is the small cap russell 2000 index that is about to pull off in this final hour a once a year trick. the russell charging ahead by 1.25%. less than an hour to the closing bell on this friday. let's start the "countdown." liz: we are just getting this breaking news. former theranos ceo elizabeth holmes has now been given a trial date. the trial date we are told has
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been set for august 4th of next year. next year. 2020. this is video of her entering federal court in san jose just a few minutes ago for a pretrial hearing. holmes is charged with felony conspiracy and fraud for allegedly misleading patients, doctors and investors who had plowed in millions and millions of dollars. you know, saying that her now defunct blood testing startup theranos could start for all kinds of, hundreds and hundreds of different kinds of diseases and problems, with one drop of blood. that turned out not to be true but of course, she got a lot of attention, known for her black turtlenecks a la steve jobs and a very deep voice. holmes was once considered a genius for developing a blood test from one drop of blood. she became the youngest self-made billionaire at the time. that of course was before the company collapsed when it was discovered her claims were untrue, unfounded. all right. you have to wait for another
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year and a couple of months to see that trial come to pass. let's get to the markets here. stocks got a boost early today, thanks to the banks, because they passed their annual stress test, so to speak. the federal reserve gave them the a-okay to boost dividends and to boost their repurchase programs. goldman sachs hiking its payout by nearly 50%. jpmorgan upped its dividend by a dime. we've got all the financials here moving higher. look at jpmorgan chase, up 2.25%. nice move there. today's session marks the end of a really shining first half of the year for stocks. the s&p up 17%, the best year to date since 1997. gold and oil not looking too shabby. west texas intermediate, that's what trades here, up 30% for the first half of the year. and gold, the precious metal up 10%, plus gold by the way is on course for its best month in three entire years. one initial public offering
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keeping it real. luxury online reseller, the real real, jumping right now 42%. today is its market debut. the stock opened at $28 a share on the nasdaq. it's at $28.44 right now. but a 40% premium from its offering price. that gives it a valuation of $2.5 billion. this is the company where people resell their clothing on the site and these are high end names like gucci and all of that. doing very well right now. let's fly to osaka, japan. we will bring the show right overseas. we are now call it seven and a half hours away from what could be this major market-moving meeting between the u.s. and china at the g20. item number one, president donald trump and xi jinping will work to steer trade talks between the world's two biggest economies perhaps back on track. president trump said he is hoping for a productive meeting but that no promises have been made to ease tariffs on chinese
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goods. while china, china has already come out swinging. earlier today, a peoples republic spokesperson said the u.s. must abandon its quote, outdated cold war mindset. to edward lawrence on the ground in osaka. we understand you have major news about china. making a trade deal, beating the u.s. to any kind of big trade deal announcement, but how could it, what is it, impact tonight's meeting between trump and xi jinping? reporter: a lot of news coming out of this g20. we will get to that in just a second. i know you love headlines. the headline here in japan for the local newspaper is trump puts abe on back foot for g20. they are talking about there the security risk that the president talked about, saying basically the u.s. is paying for japan's security if there's another war and the japanese would basically watch it on television. abe, the people in japan not happy about this comment. as far as china, what they're hoping out of the meeting between president trump and president xi jinping is for more talks. the chinese would like to see
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the u.s. come with a more conciliatory tone. president donald trump optimistic that something, though, could be done. >> the question of whether or not we do something, i think we have a very good chance. we'll see what happens. ultimately something will happen and it will only be good. good things happen. reporter: the chinese have been spending their time trying to gather support. now, the chinese prime minister or president, president xi, met with japanese prime minister and signaled that those countries are close to finishing a trade deal. president xi also telling leaders here in a speech that he is willing to protect greater protections on intellectual property, lower tariffs and open china's agriculture market. he seems to be trying to win over other countries, making his economy stronger while taking that hard line against the united states, trying to put the chinese in a good footing to take on the united states. now, the meeting president trump will tell us this meeting with president trump will tell us if this trade dispute is going to
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be prolonged or something that can be finished in the near term. it's already on shaky ground, with the chinese president saying that president trump had agreed to hold off on new tariffs as a precondition for the meeting between the two leaders but president trump publicly pushing back on that. reporter: [ inaudible ]. >> no, i haven't promised. good question. no. reporter: once u.s. trade representative wraps up a report that's being done, the final round of tariffs can be imposed by the president. the administration wants a trade deal with japan. i can tell you the u.s. trade representative says they can have a deal within weeks, however, it seems the chinese are farther along with that deal with japan than the u.s. is. the japan or japanese trade minister has said they have agreed to speed up those talks with the united states. we'll see what happens. liz? liz: edward, there's a lot of
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chess maneuvering over there. glad you're watching as the chess master. we appreciate it. let's sharpen the focus of this picture as to how the trade war is or is not depending on how you look at it, affecting the u.s. economy. the federal reserve's preferred inflation gauge came out today and it appears that for the month of may, it increased the annual change in the pce, the personal consumption expenditure, backing out food and energy held steady at 1.6% meaning the core. it's not close enough to the fed's target of 2% so you could call it benign. then there is this. we have a measure of business conditions in chicago, called the chicago pmi. this one is not so good. it fell into contraction territory, dropping to 49.7 this month. the level is 50 so anything below 50 indicates there's some concern about whether customers are rethinking purchases. that's on top of data we got last week which showed a contraction in manufacturing in the mid-atlantic and new york
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regions. philly fed was just about flat but the empire index in new york, contraction. so conflicting numbers here, some good, some not so bad. so much so that even dallas federal reserve president, federal bank president robert kaplan said we need more data guideposts before the fed makes a call on rate cuts. here's what he told maria. >> our next meeting is not until july 30th, end of july. we've got at least a month. i want to, given the deterioration in the outlook has been very recent in the last four to eight weeks, i want to take the next three or four weeks, see what happens with trade, i want to look at the next jobs report. liz: while he's not a voting member, it is important to wonder with this widely watched fed meeting a month away, so it starts of course july 30th, do we have the full picture of whether we will get a rate cut? on the screen, we put together the sort of wheel of fortune type picture, guys. i want to bring in our floor
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show traders. tim anderson, will we eventually get the e, a and t for what we're expecting in july? frments >> i think that's almost 100% certainty. clearly the market has about 100% probability of 25 basis points into the late july meeting. the fed sent out james bullard, president of the st. louis fed, earlier in the week to even tamp down the probability potentially of 50 basis point cut. i think a cut is pretty much in the cards. it will very likely be 25 basis points and the market also has priced in at least one more cut after that before the end of the year. liz: phil, i saw an article i believe on market watch where the writer said anybody who thinks it is a sure thing, including the fed funds futures which we just showed, 100% chance of a rate cut in this coming july, are out of their minds because nobody should
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really know. they're not listening to jay powell, the fed reserve chief, because he has said he's watching the data. but the data are not that bad. >> i listened to jay powell very very closely earlier in the week. he did everything but write down in black and white we are cutting rates in july. liz: okay. >> i absolutely agree. what's that song, it's too late to turn back now. they can't. they can't go back on it. jay powell sent the signal to the market. if he does, it will be a sign of weakness, another sign that maybe he doesn't know what he's doing and he's already under a lot of pressure from the white house. listen, the rate cut is in play right now and it should be. i mean, look at the pce today. we're not seeing the inflation get anywhere close to 2%. we have a lot of uncertainty right now about the u.s./china trade deal and we do have some data that seems to suggest that manufacturing is cutting back. i don't think you can read too much into one month's data because there are a lot of question marks as to whether
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that's a permanent situation or short-term situation. i think it's short-term. i think there is uncertainty, though, by these companies waiting to see how these things are going to play out. if you take that rate cut away from them, that's going to create a lot of turmoil in the market and jay powell does not want that. liz: yep. you know what, that's what we're seeing in these regional purchasing managers' indexes which is a fancy name for how these people are feeling about manufacturing and i want to bring in scott here. scott, the first rate cut that happens when the u.s. economy is not in recession leads 100% of the time, i was looking at this stat, to higher markets. so if you are a stock investor, you are cheering for this. do you see any downside the a rate cut? >> yeah, i do. i mean, yes, we have seen the numbers weaken but it hasn't weakened enough that we have to cut rates at this point in time. i get it, we are all in line to have this happen in july, but
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here's what i want to say to everybody. be careful what you wish for. because i can remember a time where i was talking about rate cuts with equity prices at all-time record highs. that's a problem. so if we've got -- something's not right. we have equities at all-time record highs, then at the same time we are talking about the economy that's faltering. so either the equities are trading politics and things are so great, i hope to get re-elected and we've got other numbers that are telling us hey, it's not that great. i say this. i think we are still improving but we are improving at a slower rate. if you are the coach your basketball team and improving at a slower rate, do you get rid of your starting five and totally start over? no. i think back to phil flynn's idea, the song lyrics should be it's too late to apologize, right. take off that quarter point rate hike that he did in december, then stand pat and wait and see because ultimately, the chinese deal is going to dwarf any interest rate cut. liz: i'm thinking of gypsies,
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tramps and thieves. tim, phil, scott, have a great friday. thank you so very much. we do just want to guide you guys to look at the markets at this very moment. the s&p is about 1% away from a record high. you know, your 401(k)s, your 529s looking decent at the moment. dow is up 16. end of an era at apple. with the closing bell ringing in 45 minutes, the tech titan among the dow 30 laggards in this final hour, after the company announced its legendary design chief, jony ive, is leaving to start his own independent design firm. he's been there for years. ive is widely credited with those innovative designs. remember the original imac with the blue and the different colors? there it is. that one. he was the guy who put that together. he also put together the ipod, designed the ipad and the iphone. he's considered one of the most important people at apple and was a close confidant of steve jobs. his new company will be called
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love from and will count apple as one of its top clients. but that's not apple's only news. up next, silicon valley legend t.j. rodgers is here on apple's decision to move production of its mac pro desktop computer from the u.s. to china? this smack in the middle of a trade war. the never-shy founder of cypress semiconductor here when "countdown" comes back.
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it all started under this buttonwood tree. twenty-four people came together to sign an agreement that created the stock exchange. just the right elements coming together. it started when scores more people came together, just down the street and traded bonds that helped pay for the revolution, and the nation it created. it started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. it started with the markets, bringing together steel and buildings and silicon and medicine and rockets. we believe the possibilities of life and investing are greater when we come together. it's why for eighty years we've connected ideas with technology, data with inspiration, investors with solutions. so that every day together, it all starts again.
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liz: well, just as president trump pushes u.s. companies to pull operations out of china, apple now confirming it's moving its mac pro computer manufacturing to none other than china. the iconic mac computer had been the only major apple device assembled here in the u.s., austin, texas, but apple says while the machines will still be designed and engineered in california, it will ship final assembly from austin to china. apple shares getting pared by 1.25% but much of that has to do with what i just told you, chief design czar jony ive departing to start his own company. with the trump/xi meeting less than seven and a half hours away right now, is apple making a mistake trusting china with its
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imac assembly? our next guest is a silicon valley legend known for sfubl y successfully cracking the whip on u.s. tech companies including one who got too cozy with china. we have t.j. rodgers, co-founder of cypress semiconductor. perfect person to talk to on this day. not sure if apple wanted to let this news out today but the timing is awfully interesting. first, i don't know, you tell us, could xi say well, doesn't appear apple's too concerned about doing business in china. my question to you is this. does this give the chinese leader some type of advantage or not at all as he sits down with president trump in just a few hours? >> well, obviously with a company of apple's stature, moving something to china, that's fodder for the news cycle. i will say that a personal computer doesn't have the same sort of intellectual property content that a phone does, and then the last point is that the president of apple, tim cook, you all ought to remember he ran
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manufacturing at apple before becoming president. it's not a dumb move. it's a calculated move that's been carefully thought out. liz: could this be behind it, that tim cook is so confident that president trump will strike a deal, you know, the so-called deal maker in chief, that he's confident enough to move that production, at least the final assembly part of it, not the whole thing, to china? >> apple is extremely sophisticated at dealing with other companies they engage in business with. i mean tough to deal with. not unfair tough, but very sophisticated. i surmise, i'm saying what i think here, i don't know, that they've got themselves a deal that hasn't got any hair on it. liz: really. do you think that president trump is going to be miffed by this and will he take on apple and call them out like he has ford and should apple care? i don't know. >> well, i can flip a coin or i can predict tomorrow morning's tweet and be about equally
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accurate. but i think he will probably gripe about it is my guess. liz: tell me about huawei and how you feel seeing that it appears this might be one of the biggest bargaining chips in the discussion. >> well, if you take huawei is an extremely confident company. that is, you have to be scared of them as a company. and what china has done over the years is they have made deals with companies, taken their i.p., the typical ploy is you have to manufacture your i.p. in china and by the way, the plant has to be chinese, then they appropriate the i.p. they've got a plan to take over semiconductors, the majority for their country by 2030. they're not going to catch up in 60 years of silicon valley in a few years without taking some i.p. so you have to worry about that. i worry about that with huawei. i worry about their ethics.
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so i think pressure on them at a minimum, forcing them to toe the line and add some new chinese laws, they have no laws on this stuff, they have some new laws they have to follow, is a good thing for america even if we have to pay in the short term with a trade war. liz: i know you don't run cypress semiconductor anymore, but i do have to ask you because june 3rd it was announced infineon will buy cypress semiconductor and the stock has done very well. i believe it is up at a high it hasn't seen since 2011. are you comfortable with that and also, it's your baby. cypress is the company you founded and ran for so many years. if you were to hear that they were moving some production to china just as apple is, would you advise against that? >> cypress had some of its production, back end, we made
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our chips in the united states but assembly and test we had back end in china. and i work now, my new job is i'm on the board of five companies that i'm invested in. i'm going to -- i'm not afraid of working with china. you've just got to be careful about your i.p. liz: t.j., thank you. we'll be right back. i switched to liberty mutual, because they let me customize my insurance. and as a fitness junkie, i customize everything, like my bike, and my calves. liberty mutual customizes your car insurance, so you only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪
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liz: can we get that live picture up? we want to take you to santa clara. a massive condo construction site, more than 50 condos are on fire right now. you can see that firefighters, multiple firefighting trucks are there to prevent a large four-alarm fire from spreading to the nearby buildings, houses and businesses, among them a holiday inn express and chick-fil-a under construction. we are told the fire is burning at this site, this is earlier and it started pretty much on
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the roof, as best we can tell. for those of you who know the area, this is the corner, sort of the intersection of el camino and scott. we did have some employees, reports of some employees around working in the area and it was being constructed at the time, now we are getting reports of some victims rescuing other victims. nobody dead, thankfully. but again, this is just to give you a sense, a few blocks from santa clara university, one block away from a town center that has a target in it and we are getting stories of chunks of wood flying and glass shattering. we will give you any more detail once we get it. you can see in some of the earlier pictures that it was all the top floor and then the bottom two were not on fire and now clearly, it appears that this is pretty disastrous for this construction site. let us get to bitcoin. bitcoin is raising some eyebrows and interest. there's a new report from coin
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base that shows bitcoin awareness is on the rise in the u.s. currency, when presented with a list that included it and other digital rivals, more than 58% of the 2,000 americans polled in this survey recognized the name of the original crypto. up nearly 20% since last friday's close. it's been a wild 72 hours for bitcoin which touched a new 2019 high above 14,000 earlier this week. right now, we are at 12,245 because we saw the frantic sell-off of 10% wednesday evening over ten minutes. but you can see that some of that has come back at the moment and we are up 1,433 per coin. again, $12,247. wild ride with bitcoin. the report also says june's crypto comeback had google searching for information at three times the pace of searches for kim kardashian. we know the earth is not going to continue spinning on its
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axis. research firm calculating that bitcoin searches rose 158% in just the past week. we are now 29 minutes from a once in a year occurrence. the rebalancing of the russell 2000 small cap index which is powering higher by a full percentage point, 1,564 is where we stand. let us talk about axxon enterprise shares. they are getting tased at this hour. it used to be the company named taser. gerri willis has all the details from the floor of the new york stock exchange with today's business brief. gerri: that's right. body camera maker axxon technology, formerly known as taser, confirming it will not be adding facial recognition to its products. the announcement coming after the company found that facial recognition technology is not reliable enough to be used by police officers at this time. currently shares are down 2.2%.
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pg & e facing a new threat for its role in the wildfires that devastated northern california's wine country in 2017. california's public utilities commission now saying it may impose penalties on the utility citing extensive violations pertaining to those blazes. these as multiple new fireses in the past two weeks have reportedly been linked to lines owned by the utility giant in the golden state. shares down 5.5%. and continental officially changing its name to united airlines holding, shedding all connection to the continental brand. trading under ticker ual. coming up, the verbal knives being sharpened at the g20 ahead of the u.s./china trade tet-a-tet. craig allen on the red lines being drawn on both sides. "countdown" coming right back.
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at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. it all started under this buttonwood tree. twenty-four people came together to sign an agreement
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that created the stock exchange. just the right elements coming together. it started when scores more people came together, just down the street and traded bonds that helped pay for the revolution, and the nation it created. it started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. it started with the markets, bringing together steel and buildings and silicon and medicine and rockets. we believe the possibilities of life and investing are greater when we come together. it's why for eighty years we've connected ideas with technology, data with inspiration, investors with solutions. so that every day together, it all starts again. ♪
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they do pirate intellectual property. it's a massive property. but the tariffs and trade war are just punishing businesses and producers and workers on both sides. >> i think the president has been right to push back on china but he's done it in completely the wrong way. we should mobilize the entire rest of the world who all have a shared interest in pushing back on china's mercantilist trade policies and i think we can do that. >> meanwhile, china is investing so they could soon be able to run circles around us in artificial intelligence and this president is fixated on the china relationship as if all that mattered was the export balance on dishwashers. biggest thing we've got to do is invest in our own domestic competitiveness. liz: just some of the ten democratic candidates for president during last night's debate, sharing their opinions on china, as we await tonight's
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g20 big-time meeting between president trump and xi jinping. we know that president trump has pushed hard to prevent i.p. theft, intellectual property that's stolen by the chinese or borrowed, depending on how the chinese see it. but you can tell these candidates say we need to keep up when it comes to advanced technology and some believe we need to work multilaterally to contain china. trans-pacific partnership, for example. president obama had advocated and president trump pulled out of the tpp. this is all areas of interest in the democratic field and for voters but what does china want and what has china already done in the short time that the g20 has begun in osaka, japan? our next guest has been there twice in just the last three months, twice to china, and represents some of the biggest companies doing business there. craig allen is president of the u.s./china business council. let me get to some developing news edward lawrence, our
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reporter on the ground, just brought us. he said that china and japan, i believe korea, is going to be involved in this too, are about to strike a trade deal, a trilateral trade deal. how are you interpreting that? >> well, thank you, liz. yesterday, xi jinping gave a speech in which he articulated the hopes for a deal with japan and korea. not only that, also with the eu, and they are also looking at a regional deal of 16 countries. so the chinese are barreling ahead and hoping to reach agreements with a good number of countries in the very near term. so this is a very dynamic and fluid situation and it's moving very quickly. liz: if xi jinping gets out there ahead and says i've got this trilateral deal, we're working together, how should the u.s. and the white house and the trump administration counter that as the president is, in
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about six hours, call it seven hours, to come face-to-face with xi for these trade talks? >> indeed. the two presidents will be meeting very soon and our understanding is that the outlines of a truce or a cease-fire are in place, and we're hopeful that that could be announced pending additional tariffs. but that would of course only be the start of a process and the fundamental differences between the united states and china remain quite deep and wide, but a truce or cease-fire might give us a time to address some of those deeper fissures within the relationship. liz: i know you represent companies that have china woven into their dna after many many years of doing business or at least having them be part of the supply chain, but surely you understand why president trump
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is fighting to at least level the playing field. you know, we cannot allow china or any other country to rip off what we have developed here, you know, the brilliance of many americans, and i think that that's important that american companies feel confident enough that the chinese will come through on the promise to not steal ideas or plans or designs just because america wants to do business there. >> liz, i couldn't agree with you more strongly. we believe that the trump administration has identified all of the right problems in the 301 submission, intellectual property rights, forced technology transfer, subsidies, state-owned enterprises and cyber, and we are hopeful that we will be able to get to an agreement at some point in the near future to address those very real problems that have been existing for a long time. without that agreement, it is
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difficult not only for american but for any high tech companies to invest or to trade in china. so it's in both china's interest and the world's and american interests to move -- to upgrade china's game here to global standards and we're hopeful to get there in the very near future. liz: do you feel that it would be a solid enough deal if the president says we'll agree to take huawei, the chinese technology giant, off the blacklist, let companies continue and once again start up doing business with them, if you promise to confirm that there will not be theft of i.p. and then all else is off the table? do you think he would lift the tariffs? >> i think that's an interesting formulation, liz, because the huawei issue is a national security issue. unrelated at least directly to the trade issues. i think more important on the trade side is to address those
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fundamental issues that you identified just now, and correct them once and for all so that our intellectual property, our cyber, our -- the subjesidies t chinese use to promote their trade, their industrial policy issues, are addressed in a forthright and measurable manner. liz: craig allen says the phones are being put together for a truce possibly or a cease-fire, we shall see. again, seven hours from the big meeting in osaka. thank you for joining us. >> thank you, liz. liz: life after conservatorship is coming. really? with the closing bell ringing in 15 and a half minutes and the dow sinking to 38 points at this very moment, the s&p up eight, the nasdaq up 18, guess what else is up? charlie gasparino with new inside details of all the behind the scenes action as mortgage
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liz: the trump administration could be on the verge of kicking the crutches out from under government sponsored mortgage giants fannie and freddie, and wall street is looking to swoop in and catch them to the tune of $100 billion? >> $100 billion. i'm sorry. i couldn't help myself. okay. the treasury plan which is going to be done in conjunction with the federal housing finance association agency run by mark calabria is going to be coming out with some sort of plan in
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the next couple weeks about how they are exactly going to reform this. as we have been reporting, the likely -- there is a good possibility, not going to say likely, not going to say definitely, good possibility that fannie and freddie when they sort of reform it, meaning they are going to take it out from government control, they are going to need to be recapitalized and how do you do that? at first you end the network suite. that's the government taking all its profits. they are both profitable right now but you need more than that to make them strong. lot of people are talking about a massive stock offering, something like $100 billion. okay. that's what we're talking about here. so why is wall street getting involved? because that $100 billion will be underwritten by someone and someone's going to buy that. so you will have buy side, investors buying it, you will have someone underwriting it. what are they doing? what we know, we were first to report this here, jpmorgan, the nation's biggest investment bank, held a private meeting on tuesday to discuss these very issues as the treasury plan is
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coming aboard. they were there with ironically most wall street firms don't sort of comingle themselves, right. they consider themselves competitors. what was interesting about the jpmorgan meeting is that moelis and company, boutique investment bank, was there. why is that interesting? moelis is the expert at fannie and freddie reform. they have been pushing a reform agenda for a long time to get them out from government control. they were at the meeting. these issues were all discussed. two things we should point out. okay. first, it's the housing story, right. what does fannie and freddie do. they allow banks to make 30-year mortgages because most banks don't want to make a 30-year mortgage. it is incredibly risky. they are lending you money for 30 years. interest rates change, economic cycles turn. so what does fannie and freddie do, they buy those mortgages from the banks so the banks can make those things. so any change to fannie and freddie could screw with that market, politically fraught. i wonder if the trump
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administration is going to go through with it. if they do go through with it with this massive recap, what happens to the shareholders. there are two classes of stock for fannie and freddie. there's the preferred shares, there's the common stock. one of the things that came out of this meeting, if you own the preferred shares you are likely to make a few bucks. they are trading at about $22 right now. that's where they should be. that's a lot of money. preferred shares have spiked over the past six months as these reform efforts -- liz: what about the other one? >> that's going to be the big problem, i think. liz: the rest of the herd. >> a lot of people bought this stock. the common is trading higher, much higher than they have been, but they are at $2.60. liz: charlie -- >> they may not make that back. who knows. liz: why do i smell another crisis or some type of bailout comi coming? >> yeah, listen, this is very complicated stuff. one other thing about this, if
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you set fannie and freddie free from the government, think of it this way. they are always going to be wards somewhat of the government. they can't survive without some government backup, right. so guess what? they're private companies with government backup. that is the recipe for trouble. that led them to be taken over by the government in 2008. liz: charlie, thank you. by the way, you guys have seen us goofing around and me being annoyed with charlie on and off the set. >> every day. liz: yeah. do you know the story of how we two goofballs got to the top of business journalism? got to listen to my latest podcast. what? >> is this really the top? liz: don't interrupt me. podcast episode everyone talks to liz claman. get your behind the scenes all access pass to the real liz and charlie. get it on apple, google or fox news podcasts.
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♪ liz: guys, closing bell rings, in 3 1/2 minutes. markets set to close out best month of june since 19, the dow since 1938. everybody up for the month. all three major indices down for the week. look at it in the aggregate. mon u.s. economy will officially clock its longest expansion on record. should investors be cheering or packing their bags? bring in the host of the bubba show, trader todd horowitz. i don't know, what do you think? >> astrider i'm looking for a spot to short this market. i think we're overvalued here. i they priced in all the good
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news for the from china. we haven't had it. look all volatility, i think no matter what happens we sell off. liz: everybody thinks if president trump strikes a trade deal with xi, we shouldn't get too excited, that the markets would absolutely take off. no, you're saying it is baked in, we could see sell on the news? >> liz, i'm as you on the other side of news. i think you get a pop and then a drop. liz: if u.s. economy is in early stages of recession, i don't believe that but you do. what should people be doing right now? you said short. how are you shorting the market? >> right now i'm long the market. i will use futures to sell the
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market. how i will get short the market. i think investors need to stay the course. we've been around a long time. markets go up average 8% year-over-year. why try to outguess the market as investor. watch liz claman. keep your phones off. quick checking the 401(k)s every day. liz: some people accuse me of being negative i'm about to tell everybody when we started hour, we were up 18 points for the dow. look at us now. in less than 48 minutes, we're now up 64 point. but you have got some picks here, roku, square, western digital. these are all tech names. >> they're all tech names. they have all been, roku and western digital have been beaten down a little bit. they're starting to pop up. i think those are great value plays. they have a great future going out in time. i think they outperform the markets. square is a great trade just
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above 70. they have bitcoin exposure. they have other things really good for them. i think they look great. liz: great to see you, todd. [closing bell rings] todd horowitz. russell once a year rebalances. it is a great day for the small caps. that will do it for the "claman countdown." have a great weekend. melissa: high-stakes meeting in japan. president trump set to meet with chinese president xi tonight. the dow marking its best month since october. all three major averages ending the day in the green on the final trading day for the month and the quarter as investors look for a breakthrough on trade. welcome back, i'm melissa francis. connell: good to be back. i'm connell mcshane, this time from miami i think. the dow is up 61. we're off session highs, snapping a three-day losing streak in the process. we'll have much more on some of these big market movers, s&p 500 with a gain of 15, 16 points into the close. a pretty good close for the day.
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