tv The Claman Countdown FOX Business August 14, 2019 3:00pm-4:01pm EDT
of global debt, we have $22 trillion here and i can go on about the leverage in the system. charles: pretty soon it will be real money. thank you all very much. liz claman, dow is off 735 points. we are buckling up. the last hour will be pretty wild. liz: it already is. we are at the top of the hour. i don't know if you heard, we are going entirely commercial-free because we are looking at panic buying of bonds and frantic selling of stocks as we head into the final hour of trade. with the dow losing 730 points right now, we have just seen the odds of a more aggressive 50 basis point cut move. they were higher, this is interesting, they were at about 24%, 25%. they are now at 21.2%. it literally just changed. a quarter of a point cut is already in play. that's already fully expected. but the federal reserve meets next month and as we say, it is
now about a 21.2% chance we will see a more aggressive half point cut. if the fed does cut like that, it has a lot to do with a rare market phenomenon we saw today for the first time in 12 years. it's not the death cross. certainly not the golden cross. it's about the twos and tens. this is called a yield curve inversion. it happens when the ten-year treasury yield drops below the two-year or shorter dated treasury yield and it's made this cross for the first time since 2007. it happened exactly at 6:08 a.m. eastern time this morning. this phenomenon has signaled a recession each of the past five recessions that we have seen, and it appeared as investors bum-rushed into the safe haven of treasuries for that reason. adding fuel to the fire, the 30-year treasury has hit a never-before-seen yield of 2.015%. we are at 2.037% right now, only slightly higher. let's look at oil.
crude is tumbling 3.25%, settling at $55.23 per barrel. we are at $55.06 so continuing to fall in after-hours trade. crude inventories rose for a second week in a row. too much supply once again. but really, you've got to figure that crude prices are swamped by worries that a global economic recession would douse demand. right now, we do, as bad as they look, see markets coming slightly off the lows. just a few minutes ago while charles was wrapping up, the dow fell 781 points. we are down 728 right now. energy, financials, tech stocks are all floundering so no surprise, we see the s&p 500 down 2.66% or 77 points but look at the nasdaq. right now, down 228 points to 7,788. why? as we told you before, technology stocks, specifically electronics that have their supply chain going through china at some point, and of course, the semiconductor makers, have
most exposure to china. we can see the nasdaq, down 228, just off the lows of the session. what really triggered this? well, the early morning rumblings began when germany, supposedly one of the most strongest economies in the eurozone, reported that its second quarter gdp contracted. down about .1%, but a contraction nonetheless. china's industrial growth came out, that number for july hit a 17-year low. you put the two together, you have fireworks. i don't mean the good kind where everybody has fun and claps. wall street's blood pressure sent sky high. the volatility index is jumping right now, about 25% at the moment. we are now at 21.84. slightly off the lows of the session. i'm keeping my eye on the dow. we are down 702. about seven minutes ago we were down 781. so the markets favored recession hedged gold. what's that doing?
catching a new bid on that two and ten-year yield curve inversion. we have gold up $15.30, now at $1,570. remember yesterday, we had such a big rally, not nearly as big as the falloff today in equities, but gold still held above $1500. right now it's at $1517. it's got silver moving higher by 1%. silver just a couple months ago was at about $15. it's at $17.17. let's check out the folks who dig up the precious stuff. looking at some of the miners here. all of them, moving higher. we do have one flat at the moment. but investors are slamming the brakes on pricey grown-up toy makers. harley davidson and polaris. i thought to myself, who really gives products that people don't have to buy like food or oil? well, harley davidson. it is down 5%, near a 52-week low. the motorcycle company already a punching bag on trade for president trump in the past.
and polaris, maker of the atvs. well, that stock is stalling, down about 5.75%. buying high in consumer discretionary will get hurt when recessionary signals are flashing red. all right. so for those investors who are thinking of buying on this dip, ubs put out this warning. here's the quote. today's backdrop with pmis, the purchasing managers index, in the low 50s and rates arguing for further declines, often results in the buying the dip being a losing proposition. i'm not sure warren buffett would agree with that, but if you bought the s&p 500 last monday, not two days ago but a week ago monday, the worst day of 2019 up until today, you bought it after the close at 2,844, you are still up a little here because the s&p right now is at 2,856. just how cautious or gutsy should you be about buying on
the lows? we bring in our traders at the floor show. i know you are busy, i know you have to rush back to your trading stations and get going with your clients but thank you for jumping in front of the cameras for a few seconds here. john, give me a sense of what investors should be doing. they bought at the s&p a week ago, you are still up. you see this as a buying opportunity or should investors heed ubs's advice? >> two things. you aren't always going to buy on the low and sell on the high. you are either going to be an investor or trader. investor's long time but traders are shorter time period. i look at more from an investment opportunity. i think you take a step back, look at the fundamentals of the things we really know and have our hands around. our economy is getting stronger and has gotten stronger over time. sentiment is much higher than it's been in the past. investors feel that this market wants to go higher and will continue to go higher. i'm behind that also. i think if you see where we have been and where we have gotten to at this point right now, markets are going to move higher and
lower. it's healthy for this to happen, healthy for flush-outs. if you don't open your newspaper you would have never known we were up 400 yesterday and down 700 today. and in one long chart it looks like a little blip. just go back to the fundamentals. if you believe in products and in our economy, this market is going to go higher. i think you look for opportunities to buy on the dips but not after a one-day decline. you need this market to sell off a few days to find that low point. liz: well, alan, we have had a few days of selloffs but in between, we had big moves to the upside so it confuses investors. are your clients confused? what are they doing? >> well, i don't think my opinion is going to change. the only thing that changed today is the inverted yield curve. yield is what we are talking about. yield just means caution. if you look at the last five times we had an inverted yield curve, after six months, five of the times the market was higher. after a year, after two years, after three years it was higher every single time.
until something different, i think the market will continue to bounce back. remember, coming into today, we were only 3% off the all-time forever high. we have been seeing a series of higher lows in the stock market, as we have seen many many times before, and also, you talk about the vix. the vix has seen a series of lower highs. even though the market's had a big selloff today, the vix is nowhere near the spike high we saw last monday. i think it's just a little bit of unwinding and sometimes, the summer, you have these days. liz: scott, okay. let's call it fun. not an adjective i would say. names like caterpillar, trade sensitive names, general electric, going down, 3m, consumer discretionary, the total opposite of industrials, economically sensitive financials which we will talk about in a second. bitcoin is getting crushed, down about 5.8% right now. what would you be buying at the moment, if not some of the obvious flights to quality like gold and treasuries where we are
having this bizarre yield curve inversion? >> yeah. let me first say that i really agree with some of the points john made. not that i don't agree with alan. john talked about being an investor, being a trader. being a trader right now is phenomenal. the trade is fantastic. volatility is fantastic for the traders. if you are going to be an investor, you are never going to pick a bottom or top. so i disagree a little bit with ubs here in saying you are going to get burned by trying to time this. what i would look at is more fundamental and also, more technicals. look at the s&p. if we go down another 2%, we hit that 200 day moving average, that's an area that i would really be very strongly inclined to start putting my money at work. i'm not saying don't put anything to work right now on a little bit of selloff, but kind of piecemeal it in. make sure you just kind of, you know, do it slowly but surely but look at those technicals. 2795 is a big one. now, to specifics, yeah, caterpillar, deere, i'm going to
even look at a couple of these big retailers. not macy's, not nordstrom. i'm going to look at costco that's getting beaten up, coming down to some real significant support, and a stock like that. i will be very choosey. but i still see no reason not to buy into the fact of when you get a selloff, buy in a little bit. liz: i'm looking at cat because i like to look at the intraday here. cat is down about 3%. it's trading at $115.60. the low of the session, about $115.04. not much off that low here. maybe we can show some of the individual names that he just mentioned as well, including deere. john, give me a sense right now of what fear, if anything, you feel and i don't mean to keep going back to treasuries, but you know, you can look, i want to explain this more because we tend to throw these terms out and i don't want to be too obvious about it but we've got to explain it. the three-month treasury yield
right now is at 1.92%. the ten-year is at 1.60%. okay? but if you look at the two, as you say, the two is just about at what the ten is doing so that is a signal that people are having a lot of trouble seeing beyond three months or even two years. >> yeah. the market activity we have seen in that asset class is clearly alarming. one thing we have to keep in mind, a guest that was on fox earlier today said this and was very clear about it and i agree 100%, this market has a very short-term memory. we are one tweet away from this market being up 300 points tomorrow and the next few trading sessions. i think having some sort of fear is okay. maybe not as strong a word as fear but being in tune to what's going on. but in reality, this market can bounce back very quickly and if we see two consecutive days of this market bouncing back, people are going to feel like they missed this bottom and will jump back in. you cannot ignore some of the factors out there.
clearly, keeping an eye on the vix is one that's going to be a better gauge. liz: alan, germany and its economy contracted today. they announced a contraction. yesterday we know or the day before, the united kingdom had a second quarter that contracted. one more quarter like that, it's considered a recession, definition of a recession is two quarters, consecutive, of contracting gdp. you want to make a bet on whether that's going to happen? >> we are a long ways away from that. so yeah, they are having their problems in europe. there is a global growth slowdown and that's been the concern overhanging concern last week. that's why the markets now are pricing in three rate cuts. we are going to get september, december and now march is a done deal as well. we are going to get rates down to 1% here very very quickly. it will still be, you know, at lofty levels compared to where a lot of countries are around the world. that's why you are seeing the money flow into our treasuries because they can still get some
payment as opposed to no payment. but again, it's always going to be in the chase for yield that the stock market right now, there's no choice. you know, like i said, you're not going to tie up your money for ten years, let alone 30 years, when we have 2.05 for a 30 year? that's never been seen before. it's hard to imagine, hard to digest that. people are going to realize the stock market is going to provide better payoffs. we saw it with earnings season. even though we expected a bad earnings season, it was better than bad so the market bounced back. again, we made new all-time highs just three weeks ago. less than three weeks ago. liz: all right. we've got to run. i do want to say to alan's point, verizon is still paying out a really nice dividend. maybe slightly down but, you know, he may be right. staying in the stock market is a better chance than paying the government to hold on to your money. >> you know what, if i can make
one last point, if you look at the next three months, that's where everyone is flocking to, if you look to the next three months, you've got brexit concerns. you've got the china tariff concern. and you've got rates. you've got three major global economic issues on hand and i think that's what everybody is focusing on for the next three months. liz: our economy is actually still holding up. gentlemen, thank you. i know you're busy. i held you over because we are not doing commercial breaks. we need to make sure we are hearing exactly what's going on on the trading floors, where the flows are moving. dow jones industrials still down about 671 points. amongst all this hammering today about the yield curve inversion where as we said, longer dated so-called safer treasuries are yielding back less than the shorter dated ones, financial stocks are getting slammed so hard that they are on pace to close in correction territory. we do have financials, if we can show that etf that puts them all together in a basket, here's some of them here.
down about 10% from the 52-week high, as lower rates tend to point to a slowing or weakening economy and that often means borrowers at banks have more difficulty making loan payments. falling interest rates are crimping their style. loan margins getting squeezed but look at the pe ratios of some of the top names. we decided to look at this for a moment because you can see when looking at pe ratios whether you are overpaying for a stock. wells fargo trading at a pe of about nine. jpmorgan's pe, 10. goldman sachs trading at a pe of just 8. one of the sector's top analysts says it's time to flip the negative narrative on a few key banks. he's here in a fox business exclusive. dick, thanks for getting in the chair with us on a very busy day. what is your gut reaction to this inverted yield curve and the 30-year yield hitting the lowest in history? >> i think unfortunately, history would argue that an
inverted yield curve does not result in bank earnings going down. in other words, from 1966 to 1982, the yield curve was inverted and again, using your definition, 90-day treasuries against ten-year notes, the yield curve was inverted 37% of the time and in every one of those 16 years, bank earnings went up. if we were to separate this dialogue into two parts, one, what is happening today to the banks and two, what is supposed to happen tomorrow, today the banks look excellent. their financial condition is extraordinarily strong. business is really good. we are seeing an increase in loans to businesses. we are seeing people buying cars again. we are seeing an increase in mortgage activity. we are seeing all of the areas that banks lend money into doing a bit better. their margins are stable. basically, the short-term rate may fall apart but it hasn't fallen apart yet and the long-term rate has come down. what does that mean? that means the unrealized
profits on the banks' security portfolios which happen to be 3.75 trillion, they are going up enormously. so the book value, the net worth of banks are increasing, they are going to have a very good third quarter. the likelihood is the fourth quarter is going to be quite good and yet the stocks are falling apart. why are they falling -- liz: go ahead. they look to me to be falling apart at the moment because lower rates are usually bad for the banks. is that not true? >> no, it's not true. in other words, from 2010 to 2015, we had the lowest rates, lowest recorded rates in the history of the united states. bank earnings went up every year except one and they hit all-time records in three years. from 1938 to 1950, the second period of lowest recorded rates, bank earnings went up in 9 of the 13 years and that's through
recession and world war. in 1950, bank earnings were almost five times higher than they were in 1938. so there's no historical record which argues that low rates mean low earnings. liz: you're confident in telling people right now to buy some names. among them, sun trust. sun trust is more of a regional. it will become one of the very biggest if it does go through with that merger with bb & t. what do you think is going to happen on that and why do you like sun trust in this particular atmosphere? >> well, again, i don't want to stand in front of a roaring train coming at me so i'm not saying take all your money and put it into bank stocks. what i am saying is you should, you should be buying bank stocks on a dollar cost averaging basis because basically, we may not have a recession, number one. number two, the yields on these stocks are phenomenal. wells fargo is almost yielding 4.5%. you stated clearly what the yield is on the ten-year
treasury. sun trust is going to emerge from a merger with bb & t which will make it one of the lowest cost operating banks in the regional area with a dominant market share in its market and its market is not falling apart. it is not germany in the southeastern part of the united states. it's the united states. the united states and the southeast is doing really well. liz: one of the things people forgot to ask themselves at the market bottom in 2009 was is x company, whatever it may be, going to go out of business. there was starbucks at $8 a share and you have to ask yourself okay, they are closing 600 stores, but starbucks isn't going away. goldman sachs is probably not going away. jpmorgan, not going away. so i get where you are going on this, but i have to pinpoint you on this. do you see a recession coming due to i guess a protracted trade war that has no end in sight? >> well, you know,
unfortunately, i've got a very narrow vision. it comes through what i see from analyzing banks. right now, there is no indication whatsoever of a recession. if you are looking at the banks. jamie dimon has said that, brian moynihan has said that. virtually every bank ceo has said that. my prism is too narrow. but the fact is if we are going to have a protracted trade problem, remember, banks are totally domestically funded. in other words, other than a couple like citigroup and maybe jpmorgan. but this is a domestic industry. the funding of these banks come from domestic sources. and there's $14 trillion of that. almost all of the loans that they make are made domestically and there's $10 trillion of those. so you may have trade problems but if the trade problems don't result in a significant recession, these stocks are so oversold that it is shocking. so again, i don't want to buy in
when the market is falling apart, at the rate that it's falling apart right now, i don't want to buy a total position. i do want to take a look at some of these companies and start buying on a dollar cost averaging basis. liz: well, they say that's exactly what you are supposed to do overall when it comes to investing. dick, thank you very much. once again, i think, this is why we pointed it out, the pe ratios right now are very low and they are certainly lower than where the whole s&p 500 is right now. as i said, jpmorgan is trading at a 10.7pe. bank of america, 9. goldman sachs, 8. "the claman countdown" has another heavy hitter at bat that will matter to you and all that's happening today with these yields and the fed and what are they going to do. quarter point, 50 point basis cut. who knows. st. louis fed president james bullard was the only dissenter back when the fed stood pat in june and did not cut rates which is what president trump was angling for, and we didn't see,
right. he felt we should have. edward lawrence will ask him specifically why he saw what he saw, what he sees now, and the rate cut path ahead along with presidential pressure. and if offered, would he take the job as federal reserve chair. it's a fox business exclusive. edward is the only one who has him. ji james bullard on "the claman countdown" tomorrow at 3:00 p.m. back to what's happening now, 38 minutes before the closing bell rings, the nasdaq may be taking the biggest hit today but if you stretch out the tech-heavy index's performance since president trump first announced the late st round on tariffs, it is down 4%. that is a bet you would lose money on. they are getting hurt, deirdre, right? the tech names, as you stand there on the floor of the new york stock exchange, are going past you on the ticker all red. >> they certainly are. really, there's no green today on a day like today. we can say it. i'm looking across all the
indices, across all the boards. want to highlight even the dow is down now close to 770 points. we will focus on tech, still so far year to date outperforming, as we look at the nasdaq, the s&p 500, and the dow. but some of the names that are falling right this second, amd, activision, electronic arts, i made a quick list for you there. you know, we have been following tech, such a stalwart, such a strong part of the rally that we have seen in the past two years that i think it becomes all the much more remarkable even as an indication of sentiment to see the red on the screen even for this particular sector. it is among the top of three falling sectors, if you look at the s&p 500, the ones that are weakest overall. it seems to really be the sentiment call i know you have been talking about this with your guests, but the fact there was a surprise weak economic data from china, that 17-year low output number, and of course
these tech companies all extremely international in the way they do business, and that second quarter read on euro gdp of course not helping sentiment at all for technology. most of these companies function as truly international ones and they certainly are not being spared this selloff today. i would be remiss, you were talking about some banking names. that's one of the other big groups that's falling the most. and energy as well. we are just seeing these overall investor spheres of fear show up in the stock market, the bond market and commodities. liz: we just hit a new low on the dow jones industrials. again, just hitting a new low. we tried to make a comeback, at least the bulls did, and at the moment, we just hit the brand new low, call it 794 points clipped from the dow jones industrials. >> on that average, you are really seeing the financials which is what you were covering as some of the biggest weights. goldman sachs, jpmorgan, citi as
well. these are dragging down the average. liz: absolutely. bank of america. jpmorgan. it's a very nowhere to hide kind of day. deirdre, please stay close to that camera. no commercials, folks. we are sticking with this pretty severe selloff. even in light of all of that, we are looking at an individual stock story that we talked a lot about yesterday, this remarriage honeymoon between, yes, cbs and viacom, just one day afterward it looks like their massive merger is already having a few issues, because those stocks are plummeting and now we are also looking at t-mobile and sprint on another issue charlie gasparino is working. >> t-mobile and sprint, sprint is going up a little, t-mobile's down a trifle. it might be on the headlines we are generating. sources are telling the fox business network that as you know, there are 16 state attorneys general suing to block this merger. we understand that officials at
t-mobile/sprint have entered into what is being described as early stage settlement negotiations. they have reached out to those 16, to the leaders of those 16 state attorneys general, letitia james of new york is one of them and they are trying to say can we start talking about possibly ending this lawsuit which would -- which could derail the deal. i'm not saying it will. you are in federal court, you know, you have -- i think there's a clinton appointed judge in the federal court in the southern district of new york which is hearing this case to block the deal on antitrust grounds even though it's passed antitrust muster with the u.s. department of justice. what these attorney generals are saying this is not enough, this merger is still going to lead to higher prices for consumers. from what we understand, sprint and t-mobile have reached out. now, what are they offering. what we can tell they are offering, at least up front, is some sort of way to create a federal wire service, a
subsidized wire service for low income individuals. it's one of the ideas they plan on pressing with the attorneys general. what's their game plan? i don't think they really believe they can get all 16 to essentially say okay, we're done, it's over. i think what they are looking to do is weaken them, tick off five or six, maybe get the one republican that's in there, the texas state attorney general, get him to drop out and when this thing goes before the courts, you have a weakened case. at least that's what they're doing, that's what we understand they are doing. again, this is early stages. we have put in calls to the state attorney general for new york, who is leading this, and we are waiting to hear back just -- liz: you're not going to believe this. actually, you are. president trump is making some comments right now and boy, is he really opened some insults on jay powell. he says we are winning big-time against china but he says the problem is with the fed. raised too much, too fast. jay powell and the federal
reserve, clueless. he's calling them clueless. >> listen, this is a game, listen, we are going through a pretty rough transition here from sprint/t-mobile -- liz: i wanted that out there. >> you got to give me a second here to get my thoughts. one thing i will tell you about this is in the markets right now, there is a debate and it's mostly people that support donald trump, are trying to pin this on powell, but most people, even people that are neutral to supportive of trump's economic policies will say this. jay powell screwed up by tightening in december when the economy looked like it was slowing and that's having an impact right now. but why was the economy already slowing? the impact of the trade wars that donald trump and the uncertainty of them. listen, we are not just talking about china. we are talking about massive amounts of trade wars across the globe going after mexico, canada, reopening nafta. when you do that, that creates
uncertainty for businesses. if you look at the one part of gdp that was down big-time in the last print, it was business investment. why is that? because businesses don't know what to do because they don't know where trade policy is going. i will say this. you can blame jay powell all you want. he deserves some blame for the tightening in december. no doubt. he tightened in the middle of a slowdown. but that slowdown and the continued slowdown is because of trade. let me tell you something. if president trump turned around tomorrow and fired peter navarro, his hawk i cish trade adviser, the market would be up 700 points because he's the guy that's behind this sort of, like it's an unmoored policy. it has no sense. it's one thing to go after china and isolate them which all the world wants to do. it's another thing to go after everybody and create this sort of uncertainty. by the way, he had everything going for him. he had a tax cut, deregulation -- liz: our viewers are very smart. okay? i have been hearing -- >> some are.
some are. i hear some of them that's not too smart. liz: they are very smart. sorry, folks, they're not buying this let's blame all of this on jay powell. they're just not buying it. >> okay. good. liz: i think if i were to guess -- >> are you saying they're not buying it? liz: they're not buying this, the blaming the fed on all of this. >> i get a lot of them that are buying it. i don't know why they are. liz: can you wait? hold on. look at this, prices to us have not gone up. i'm not sure where he's getting that. for some, the prices have gone up. not everything. it's not widespread yet, the price increases, but i have talked to multiple, multiple different businesses, smaller ones usually who they can't make their payroll. >> it's not just prices. i think he's kind of missing the point here. the point is that businesses find it difficult to invest in an environment where you don't know where -- what type of
tariffs you are going to face across the globe. that is the problem. let me tell you something. liz: you think he's looking at what's happening with the dow? talking about president trump, who is now heading back down to lows of the session. >> it's not just about powell. liz: somebody reach through the tv and just -- okay. just wait. 777 points to the down side. s&p is also, broader index, let me finish the thought here, please. do you think he sees this and is now putting this out here, these comments, calling jay powell clueless, it's not working at the moment. it's sort of the crying wolf thing. >> i don't think the markets really are buying it. listen, jay powell may be clueless. again, what he did in december was not the smart move. in the face of he should have known the economy was slowing. but he's now reversing course. we should point out something else. trump has not, and peter navarro have not reversed course on trade. it is so obvious that -- liz: they did delay the 10% tariffs for some of the goods coming in from china.
but that is an implicit admission that it's the consumer here in america that's paying the tariffs. they don't want to get voters upset. >> wonder if it's too late. here's the thing. you do have massive slowing in global economies. you had in your last segment you talked about germany. we know that one of the strongest economies in the world, we know china is slowing. these are all places that buy stuff from us. if you put that on top of slowing growth here in the u.s., lack of business investment, you have a problem. now, what is really causing this? it's the flattening of the yield curve, obviously. why does that matter? when long-term bond yields go down, when prices go up, that's a signal that we are hitting an economic slowdown. why is that? because people buy bonds as a hedge against, when inflation goes down you buy bonds. because inflation goes down when there's a recession. so just to put it out there, that's kind of what caused this. this flattening of the yield curve meaning the bond yields, prices are going up, bond
yield's going down and the long bond yield is becoming equal with the short term. liz: we have just gone below the 200 day moving average here. this is a six-month chart of the dow jones industrials. we are down 768. 770 points and falling here. 25,514. >> one other thing to remember, i think our viewers, if you have been in the market, you talk about the trump bump all you want. if you took a dow, a line of the dow from the minute he started the trade war which began about january right after he passed this tax cut, right, the market had priced in all the positive from the tax cuts and deregulation before that, which was good, if you look at it from january 2018 to now, the dow jones has essentially flatlined or is lower. you should take a look from january 1 or 2 to now, '18, the dow has flatlined. that shows you the impact of trade. markets are pricing in the potential that trade will slow
down the economy. liz: okay. >> trade war, i should say. liz: people are not seeing this fall as an intermediate buy signal. 3:33 p.m. eastern. we are going to reset this at the moment. we have 27 minutes before that closing bell rings. it has been a very ugly day from the start. germany's economy contracted in the second quarter. that freaked out the overnight traders. then we had china's industrial numbers come in at a 17-year low. our markets took off to the downside. the bears came out of their caves. the bulls retreated. we are down 763 points for the dow. the nasdaq is getting slammed, down about 3% or 238 points. can we show the transport sns the transports are getting hit the hardest, down a full 3% here or 302 points. these are the ones that have the railroads, the airlines. these are the transportation names, some of the trucking companies, fed ex, ups. that is a very bad picture at
the moment and is getting worse. what are we looking at, deirdre, from the floor of the new york stock exchange? i know that 15 minutes before the hour is when we start to see real buy and sell pile in. >> indeed. we are waiting in these last moments of trade. you called it, the dow is now down off its lows but it's really down. 723 points as we speak. whether it's tons of pressure from the financials, you have been covering that with your guests. of course, you have goldman sachs, jpmorgan, these are the ones that are adding the most pressure on to the dow jones industrials right now. tech as well and energy. you highlighted all of those data points coming from europe and asia. i want to call your attention away from the general market selloff and on to one company that will be going public soon. we work as we know providing work spaces, services for entrepreneurs, freelancers, startups. it has officially filed to go
public. worth noting, earnings quadrupling so you have revenue at 1.82 billion but it also has big losses, which is a theme we have seen with a lot of startup companies. so lots of sales, no profits yet. in the first six months of this year, the company posted $1.54 billion in sales, if you like, but a loss of $700 million. planning to list as w-e. not sure what exchange it goes on but it has a valuation of $47 billion. we will be covering that of course on the day it goes public. mylan in the crosshairs of the house oversight committee for apparently stonewalling the probe into generic drug prices. house oversight chairman elijah cummings and senator bernie sanders sending letters to both companies asking for documents related to the review. both denying they are obstructing the inquiry. mylan saying it is prepared to make its case in court. teva says it is fully cooperating as shares of the two
giants down lower as well along with the rest of the market. take a look at walt disney, charter communications. they have reached a new multi-year carriage agreement which avoids a costly blackout of espn ahead of football season. charter also agreeing to carry the latest espn offering related to college sports. the two companies agreeing to work together as well to fight piracy. take a look at those shares, they are lower as well. again, with the overall tone. back to you. liz: i know that you are watching a lot of the retailers as well and we do have to tell you that it's not just been an ugly day for the retailers. it has been a horrific two weeks for the retailers. rewind this picture. two weeks ago when president trump sent out this tweet that century tailers across the u.s. into an uproar, you can see what happened since then. he said during the talks, the u.s. will start on september 1st putting a small additional
tariff of 10% on the remaining $300 billion of goods and products coming from china into our country. this does not include the $250 billion already tariffed at 25%. that news made the footwear guys happy once we saw that kind of delay, just one day after that tweet back on august 2nd, take a listen to what the ceo and president of the footwear distributors and retailers of america said on "the claman countdown". >> the administration seems so intent on describing this as something that chinese pay and you can't find an economist anywhere outside of peter navarro that will tell you that's the case. so we're not quite sure why he keeps saying that. liz: okay. on top of matt, charlie gasparino just dumped all over the president's econo guy, peter navarro. by the way, peter navarro called me directly after that interview and said i want to come on and explain why it's the chinese paying the tariffs. we thought let's bring back matt
priest because tomorrow, peter navarro says he will come on this show. you are back, you are the head of the retailers and distributors of america ceo and president. matt, tell me what is going through your mind right now. >> oh, my gosh, liz, you know, the uncertainty continues in spite of the fact that we have this delay on really a bifurcation of the list of footwear so splitting up footwear, 53% is still going to be hit with 10% on september 1st. 47% with 10% december 15th. as you just said, it was an implicit, you know, recognition that the american consumer will pay this. so i hope, i hope, i hope that you ask peter navarro how does he reconcile the fact that every american business that imports and says american consumers will pay this, the president has now admitted american consumers pay this so where do we go from here? how do we drive certainty when the marketplace is so uncertain?
liz: i'm looking at nike. nike is getting hit today, obviously. it is down about 3%. you could look at foot locker down 5%. your guys, for whom you speak, dick's sporting goods, under armour, they are getting crushed right now. what is your advice? the president would say pull your operations out of china. >> yeah. you know, what's really interesting, that's a great question because if you look at the list, the first list that is going to be hit on september 1st is the more diversified list. it's the companies that have diversified out of china and are trying to move their product -- liz: such as who? >> so that product comes less from china than anywhere else. that's going to be hit first. so there's really no rhyme or reason to why they decide -- they make these decisions on which list gets hurt and which gets delayed. i can just tell you, our members are so confused as to how this is going to play out and as we talked about before, we are at the 90th anniversary of
smoot-hawley next year. we have been paying duties forever. these get put in place, this could go on for a long long time. liz: president trump did say when he announced that some products would get a reprieve from that 10% tariff that's supposed to kick in september 1st that he was doing it for the christmas season. listen, if i were more of a politician, which i am not, i would think to myself yeah, he doesn't want to annoy voters who want to buy things like consumer electronics and nativity scenes which believe it or not, nativity scenes have been exempt from those 10% tariffs in a couple weeks, that he does not want to annoy american consumers ahead of the holidays and ahead of the 2020 elections. >> that's right. so what does that tell you? it tells you that he knows in his heart of hearts that american consumers pay duties. these are taxes. you add to the cost of a good coming across the border, that
cost gets multiplied out and the american consumer pays more and even chris wallace a couple weeks ago presented this to peter navarro, showing that goods that have already been hit with tariffs, consumer price index, the other indices are going up on those products. so it's an unavoidable fact, the president has admitted it. this delay admits it and our notion is why don't we just stop this all together. why don't we kind of pull this back, the duties back, don't tax american consumers to change chinese behavior. there are other ways to do it. liz: you've got to do something about this i.p. theft. they are stealing and it's not just electronics and intellectual property when it comes to fancy gadgets. i have talked to shoe makers who say the chinese knock off everything. surely you do understand that part of what president trump is doing. >> yeah. we do understand that. so in august 2017, we were hopeful that the administration was going to launch its investigation and find that intellectual property was of key
importance and is very important to our brands, something we spend millions of dollars to protect, particularly e-commerce era, more and more knockoffs and counterfeits are being sold on e-commerce platforms so it's a high priority for us. but at the end of the day, do you tax american consumers to get china to stop knocking off our goods? it makes no economic sense to us. that's why we are frustrated with these additional duties. liz: matt priest is the mouthpiece and ceo and president of footwear distributors and retailers of america. i hope you watch tomorrow because peter navarro says he will come on. he doesn't love you. just so you know. >> i appreciate it. thank you, liz. liz: you got it. what are people with a lot of money waiting to just pile in and buy certain things that are now cheap doing? i'm talking about right now. we've got one on the phone. billionaire investor jeff green, who made a lot of money shorting subprime during the ugliest points of the financial recession eight to ten years ago. he's on the phone with us right
now. jeff, thanks for getting on the horn. >> good afternoon, liz. how are you today? liz: i'm a little crazed because we do have the dow down 720. more importantly, the s&p is down 78. that's 500 stocks. are you buying? what are you doing on a day like this? >> well, i'm actually in a fair amount of liquidity right now but this is not something that that is unexpected. we have had an economy that's been rigged for a long long time. when you think about it, we've had, you know, asset bubbles. $14 trillion [ inaudible ] coupled with rates held at zero has led to asset bubbles. it's not just china. liz: what bubbles do you see right now where you are avoiding or shorting? >> well, look, i'm not -- honestly, i wish i could say i'm out buying things today but like
everyone else, unless you're a liar, everyone is having a bad day who's in the market. obviously, everybody's stocks have done badly and these interest rates could be a harbinger so i think in general, we just have to look at this. this is a time to be cautious because it's not just the china trade war. look at brexit. who knows where that's going to go and boris johnson's reign, he could very well, we could have jere jeremy corbyn running that country. countries are yielding to leftist leaders everywhere. in this country, there's a very good chance elizabeth warren will be our next president -- liz: wait a minute. hold on. why do you think there's a good chance of that? >> isn't she number two right now? joe biden is having a difficult time maintaining his lead and his stature as the front-runner. i think she's right behind him.
she's very well thought of. she's what democratic primary voters largely like. liz: jeff, she wants to tax the wealthy in an outsized fashion. i know you have been one of the so-called patriotic billionaires. you said tax me more, it's called democracy insurance. we don't want such a huge wealth gap. you have actually done some real work to try to come up with solutions on closing the wealth gap. but she could kill off the golden goose. that's what buffett said about bernie. >> well, there's no question about it. it's frightening stuff. but i think the market hasn't started to focus on that yet but let's be realistic. just picture her in the debate next to joe biden when he starts saying some of the crazy stuff he says and whether you like her policies or not, she's a harvard law professor, very articulate, and plays right into the agenda of those who show up at democratic primaries. if she's the nominee and up against donald trump, i think
that could be the biggest nightmare for our economy since the depression if she became president. however, there's a very good chance that could happen. i don't think the market is discounting that at all. liz: what has been your best trade this year and what are you waiting to buy when it gets cheap enough? >> well, look, i'm not a trader but i can tell you my biggest positions are alibaba, apple, google and a small amount of facebook. i'm in heavy tech. these are great assets. i'm someone who likes to buy top quality assets and close your eyes on days like today and throw those stocks to the back of the drawer and understand you have best in class companies that will weather these storms. on a day like today, as smart an investor as you might be, if you love amazon, if you think amazon is going to be the dominant force in retail and the cloud for a long time, this is a good
day to buy it. not to abandon it. the same with alibaba. alibaba is, think about the company is growing by 30% to 50% a year. they are going to have, there are 200 more million people on the internet in china in the next five years. these are the kind of companies you will buy on a day like today. i'm not a trader but i'm hold onni ing on to core positions and weathering the storm. liz: alibaba cheaper than it was yesterday. great to hear from you. thank you very much for getting on the horn. jeff greene, billionaire investor. dow still down about 716 points. let's mark it, 12 minutes to go before the closing bell rings. no commercials,folks. we are watching every single tick of what has been a very difficult day for the bulls. anybody who is long. let me quote jeff greene, what he just said. unless you are a liar, everyone's having a pretty bad day in the markets. unless you are totally short or
completely in cash underneath your mattress. i know some of you might be. we need to look at retail stocks. specifically the brick and mortar department store names including everyone from nordstrom's to tiffany getting absolutely wrecked. nordstrom down 10.5%, tiffany, down 5.66%. macy's of course, premarket it started to get really ugly. macy's down 12.25% after totally whiffing on their quarterly earnings. and they lowered their full year profit forecast. macy's cited particularly vicious competition from higher end reit sale sites. the real real actually spiked 9% premarket which this chart doesn't exactly show but you can see where it started, was doing great premarket on news that it beat on revenues. doing gangbuster business. where do you think they are stealing their customers from?
probably macy's, among others. now you can see the real real down about 15%, getting swamped by the broader market selloff even in light of good ne. macy's ceo did not blame tariffs for his miss, but he did issue a clear warning about tariffs. >> we have confidence that our scale gives us the leverage to find mitigation strategies that work for us, our vendor partners and our suppliers in china. we know from the earlier tranche of tariffs, though, that today's customer doesn't have much appetite for price increases. liz: all right. are higher tariffs on chinese made goods inevitable? yesterday the administration said wool and knit sweaters along with ski wear and jackets, things like windbreakers, would not be exempt from the 10% tariffs kicking in september 1st. president trump as you know did delay tariffs on consumer electronics and toys, among other items. many say that's his first acknowledgment tariffs do hurt american consumer.
regardless, investors do not at the moment see this selloff as a buy signal when it comes to these retail names. how much worse could it get for the retailers? to kristina partsinevelos in the newsroom. jeff gannette was very clear, with or without the tariffs, viciously competitive landscape he's looking at. >> the last line, he did say consumers do not have an appetite for price increases. that's something i think we really need to focus on. given that these tariffs haven't really been passed on to consumers as much as they potentially could be. on the conference call today, he did say that they weren't going to increase prices with that 10% increase, but should tariffs increase to 25%, then they could potentially increase prices. last time in may, they did slightly increase prices on luggage and housewares and realized consumers don't like it. the earnings report was really a miss and not primarily due to tariffs. more because of just the woes that plagued macy's for so long. they missed on their athletic
private label. it didn't do well. it wasn't fashionable enough. they had a slowdown in international tourism which i think is a big sign about the economy, too. weaker tourism, stronger u.s. dollar which makes it more expensive to buy clothes in america. then too much inventory which led to discounts which i love sales but that's not helping their margins. overall, you brought up the real which is a great point. macy's actually said they are looking into selling used items, banana republic did it on fifth avenue for those new yorkers that ever stroll around here, i went in, they were selling second-hand gucci and second-hand chanel. we are starting to see this trend as the likes of realreal continue to steal market share. you look back at some tech retail stocks, they are getting hammered. nordstrom down quite a bit. their total sales last quarter down over 5%. you are seeing across the board, it's the big department stores that are facing weakness but walmart, i want to end on this,
walmart is something to look out for. they come out tomorrow. they had a stellar last quarter, e-commerce up 37%. their same store sales for the past three quarters have been over 3%. i spoke to one trader that told me that right now, he's focusing on what walmart will say on that conference call because of tariffs. he's long kohl's because of their deal with amazon. but it's gotten out of most of his retail positions. liz: thank you. retail in the red. so are energy stocks. let's bring in our floor show traders along with brandywine global portfolio manager jack mcintyre and lamar billary. seven minutes before the closing bell rings, jack, where are you putting money right now on a very difficult day that scares a lot of investors? >> so it's not a difficult day if you are long treasuries. we like treasuries because there hasn't been inflation and you've got to sort of worry a little bit about the chance we are
going through a global recession are certainly elevated right now and the fed might not get that and they might sort of not be quite as aggressive cutting rates. this is part of asset allocation. you need to own treasuries in almost any environment. liz: okay. i'm looking, so we see the ten is 1.59%. the two-year is at 1.589%. that is just about as flat as it can get. but phil, why is energy so outsized when it comes to the shiners it's getting from these punches in the markets? i understand there's worry about both supply and of course, demand if the whole globe goes into recession but we're not there yet and the u.s. economy is still very good. >> yeah. you're absolutely right. in fact, we look at the numbers, actually oil is about $1 off the low prices when the stocks were hitting the low. actually, if i look at the demand numbers we got from the energy information administration today, it's not showing a recession. it's showing an economic boom. we are seeing record demand for
oil products here in the u.s. our exports bounce back, they're not quite at a record high but they are very close. so there seems to be a disconnect from what we are seeing in energy and some of these commodity prices than we are actually seeing in the stock market today. i know a lot of this today has been predicated by the inversion of the yield curve. keep in mind, people say oh, man, when the yield curve inverted back in 2005 we were just, you know, a couple years away from the great recession. does anybody look at what the market did after that inversion in 2005? the stock market went up another 26%, 27%. oil prices went up like $100 a barrel. so the inverted yield curve is like predicting an earthquake maybe in california, it may happen in two years but it might not. liz: true. in fact, in many of the inversions, once it inverts it takes six months to another year before we actually see the recession. that's true. but it's scary for people and lamar, i want to bring you in
here, it's scary for people who see that and think to themselves well, i can't see the future, i don't know if it's going to be six months to a year but that said, this treasury issue, put that aside and look at tariffs hitting semiconductors the most and yet you like a semiconductor name. >> absolutely. the key there, as we discuss this, the key is the tariff war is priced in. so you are trading, you have a company that's growing, trading at ten times next year's earnings so you've got the upside potential if the tariffs do go away which the president can do at the snap of a finger, a significant upside, pretty good outlook regardless. liz: okay. you have some positive feelings about this market. folks, i do just want to say the dow is down 762 points. low of the session is a loss of 794 points. the s&p, we have to go down 86 points to hit that low of the session and for the moment we do
have the s&p down about 81. so we are really not far off the lows of the session there. chris robinson, tell me if you are seeing any last minute flows with 3:30 to go before the closing bell rings. go. >> i think if you look at the low today, it's 7% off the top. there's a big fascination out there with 10%, 10%, where is 10%. 10% is the june lows. if you are worried about the downside, that's what people are looking at. is that an opportunity to step in there and buy? it's very easy to figure out what those levels are and i think between now and september, a lot of things are going to change when we get to september. everybody will come back to work and the first string will be back in here trading and we will see where we are. august is a very difficult time to trade. liz: okay. i asked you about flows. are you seeing any bottom surfers at this moment? >> i would say -- liz: chris. >> yeah. i think right now you will see i think on the close, you will probably see some people stepping in there and trying to
get long the s&p futures heading into the night, trying to buy this dip. liz: jack, what is your prediction for the rest of 2019, as phil and i were just pointing out, we could see another six months of great moves before recession were to come, if it is indeed a predictor. >> yeah. i think at a minimum we will see more volatility. i'm not giving you any sort of inside information there. but i think the risk of global recession is elevated not just because what's going on with the trade but china has been slowing. they have been reluctant to sort of spur their economy using more stimulus. so the u.s. is not this sort of economic island. we are not immune to the weakness we are seeing globally. i think the ball is kind of in the fed's court right now. just because they need to meet market expectations in terms of cutting rates. i think again, yields could head lower from here even despite this move. liz: at last check we saw 21% chance, lamar, of a 50 basis
point cut by the federal reserve. you have to tell me, do you predict an intrameeting cut? that would be an emergency cut. >> absolutely not. liz: you do not see that. >> no, we don't. liz: do you think all of this is federal reserve chief jay powell's fault? >> absolutely not. i think they have actually been pretty aggressive relative to historical trends. i think they have been aggressive with cutting rates. some obviously disagree with that but we think they have been more aggressive than we expected as of a year ago, it looked like rates were rising. pretty significant change in a relatively short period of time. liz: chris, about 37 minutes ago, president trump made some comments and called jay powell clueless once again. your thoughts on that? i want to get different opinions. >> well, at the end of the day he's been a pretty strong critic of the current fed. he wants it to be more aggressive. i think the fed is actually being cautious. let's see if europe cuts rates more. they are the ones having more difficulty than we are. i think that for sure, the
markets priced in another 25 to 50%. we will see if that happens next. if that happens, things calm down a bit. >> it is ugly. >> recession fears plaguing wall street, and strayed uncertainty. the dow taking another leg lower there at the close. and ending down. better than 800 points. lowest close in two months. obviously the low of the session. i'm melissa francis and i blame you. >> i'm connell mcshane, somebody has to take the blame. the nasdaq and
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